SHANGHAI: Japanese rubber futures fell to their lowest levels in six weeks on Thursday, as a third consecutive day of oil price declines and a deteriorating outlook for Chinese car sales continued to pressure prices.
The Osaka Exchange (OSE) rubber contract for December delivery was down 7.4 yen, or 1.79percent, at 406 yen (USD2.51) per kg, its lowest close since May 22, when it settled at 405.7 yen.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 135 yuan, or 0.81percent, to 16,570 yuan (USD 2,442.04) per metric ton. The most active September butadiene rubber contract on the SHFE shed 360 yuan, or 3percent, to 11,630 yuan per metric ton. Oil prices dropped about 1percent on Thursday, down for a third consecutive day, after Qatar said Iran and the US had made progress in indirect talks focused on the Strait of Hormuz, which handled one-fifth of global oil supply before the war.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Chinese electric vehicle maker BYD’s domestic sales fell 22percent year-on-year, weighed by fading policy support following subsidy cuts, a prolonged property market slump that has hurt household wealth and confidence, and elevated dealer inventories.
Car sales in China, the world’s largest auto market, are forecast to fall 11percent this year, a sharp decline from a previously estimated 1percent decline, according to the China Passenger Car Association. Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres. The front-month rubber contract on Singapore Exchange’s SICOM platform for August delivery last traded at 209.1 US cents per kg, down 0.1percent as of 0700 GMT.
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