SINGAPORE: Japanese rubber futures fell on Wednesday, pressured by declining demand for tyres and accumulated inventories.
The Osaka Exchange (OSE) rubber contract for January delivery ended daytime trade 4.3 yen, or 1.35%, lower at 313.8 yen ($2.13) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery dipped 205 yuan, or 1.29%, to 15,675 yuan ($2,182.87) per metric ton.
The most active October butadiene rubber contract on the SHFE fell 150 yuan, or 1.26%, to 11,450 yuan per ton. Despite continued rainfall disturbances lending support to raw material prices, tyre demand is declining and inventories are accumulating at a high level, said broker Everbright Futures.
Markets are experiencing risk-off selling, similar to equities, a Singapore-based trader said. The dollar edged down to 147.46 yen, as traders kept an eye on the Federal Reserve’s Jackson Hole annual symposium this week for potential policy guidance.
A stronger currency makes yen-denominated assets less affordable to overseas buyers.
Meanwhile, Chinese electric vehicle maker Xpeng forecast its third-quarter revenue would double, with government stimulus to boost consumer spending helping boost demand for its cars despite challenging economic conditions.
Automobile sales could influence the intensity of vehicle manufacturing, which involves using rubber-made tyres. Meanwhile, oil prices rose on talks to end the Russia-Ukraine conflict.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Top rubber producer Thailand’s meteorological agency warned of heavy rains and accumulations that may cause flash floods and overflows from August 21-26.
The front-month rubber contract on the Singapore Exchange’s SICOM platform for September delivery last traded at 168.9 US cents per kg, down 1.2%.
Comments
Comments are closed for this article.