SINGAPORE: Japanese rubber futures closed flat on Monday as sliding oil prices and concerns over China’s economic slowdown countered support from a weaker yen.
The Osaka Exchange (OSE) rubber contract for March delivery ended flat at 302.9 yen (USD2.01) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery dipped 10 yuan, or 0.07 percent, to 14,810 yuan (USD2,079.18) per metric ton. The most-active November butadiene rubber contract on the SHFE fell 100 yuan, or 0.91 percent, to 10,840 yuan per ton.
Rubber futures traded lower last week, weighed down by full-scale production in ASEAN countries, concerns over China’s slowing economy and subdued global tyre demand, Japan Exchange Group said in a report on Monday.
China’s third-quarter economic growth slowed to the weakest pace in a year, as a prolonged slump in the property sector and ongoing trade tensions weighed on demand. Oil prices dipped amid US-China trade tensions.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The dollar gained as much as 0.4percent to 151.20 yen as fiscal dove Sanae Takaichi appeared set to become the next prime minister of Japan. The yen eventually closed flat.
A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers. Top rubber producer Thailand’s meteorological agency warned of heavy rains and accumulations that may cause flash floods and overflows from October 21-25.
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