SINGAPORE: Japanese rubber futures inched higher on Tuesday, supported by a stronger Nikkei, although worries about weaker growth in Asia and the COVID-19 outbreak in China capped gains The Osaka Exchange’s rubber contract for October delivery finished 1.1 yen, or 0.4%, higher at 251.4 yen ($1.97) per kg.

Japan’s benchmark Nikkei share average was up 0.4%.

Gains were limited by lockdowns in China, which were slowing down the use of tyres, leading to weaker demand for natural rubber from tyre manufacturers, said a Singapore-based trader.

Traders in the Shanghai market are still bearish due to news that Beijing may go into a lockdown, the trader added.

The Asian region faces a “stagflationary” outlook, a senior International Monetary Fund (IMF) official warned on Tuesday, citing the Ukraine war, spike in commodity costs and a slowdown in China.

The rubber contract on the Shanghai futures exchange for September delivery was down 230 yuan to finish at 12,635 yuan ($1,928.18) per tonne.

Three-quarters of Beijing’s 22 million people began lining up for COVID-19 tests on Tuesday as authorities in the Chinese capital raced to stamp out an outbreak and avert the kind of city-wide lockdown that has shrouded Shanghai for a month.

The front-month rubber contract on Singapore Exchange’s SICOM platform for May delivery last traded at 161.3 US cents per kg, down 0.1%.