SINGAPORE: Japanese rubber futures tumbled to their lowest in more than a month on Monday, as growing trade tensions surrounding China weighed on the top consumer’s economic prospects and sent its equity markets sliding.
The Osaka Exchange (OSE) rubber contract for June delivery slid 15.2 yen, or 4.06%, at 359.3 yen ($2.28) per kg, closing at its weakest since Nov. 29.
The March rubber contract on the Shanghai Futures Exchange (SHFE) fell 335 yuan, or 1.96%, to finish at 16,750 yuan ($2,285.41) per metric ton.
“The rubber market has faced pressure recently, influenced by equity sell-offs in China and bearish sentiment, as government stimulus appears delayed until the US presidency transitions,” a Singapore-based trader said.
China’s stock exchanges and central bank scurried to defend a tumbling yuan and falling stock markets on Monday, trying to soothe investors concerned about Donald Trump’s return to the White House.
Beijing will sharply increase funding from ultra-long treasury bonds in 2025 to spur business investment and consumer-boosting initiatives.
The country’s services activity expanded at the fastest pace in seven months in December, driven by a surge in domestic demand, but orders from abroad declined, reflecting growing trade risks to the economy.
Production in Thailand and Vietnam is at its peak as weather conditions have improved, Chinese commodities data provider Longzhong Information said in a note.
Still, rubber processors are cautious about purchasing raw materials as prices remain high, Longzhong said.
The northeast monsoon prevailing over Thailand’s gulf and southern region will weaken with less rains and isolated thundershowers over Jan. 7-9, the country’s meteorological agency said on its website.
The front-month February rubber contract on Singapore Exchange’s SICOM platform last traded at 184.6 US cents per kg, down 1.6%.
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