BEIJING: Japanese rubber futures extended losses for a fourth session on Monday, hitting their lowest in over seven weeks on weak demand. The Osaka Exchange (OSE) rubber contract for May delivery closed down 9 yuan, or 3.5%, at 247.7 yen per kg, its lowest since Oct. 12.

The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery was down 245 yuan, or 1.79%, at 13,480 yuan per metric ton.

“Physical markets for natural rubber are likely to be weighed down in the short-term by a seasonal increase in supply and weak demand,” Jom Jacob, co-founder of India-based analysis firm What Next Rubber, said.

“However, hope of a tight supply emerging globally by March 2024, weakening dollar and strengthening currencies of major exporting countries can hold the prices from abnormal falls,” he added.

Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 11.2% from last Friday, the exchange said on Friday.

Japan’s factory activity shrank at the fastest pace in nine months in November as sluggish domestic and international demand squeezed firms’ order books, a private-sector survey showed on Friday.

Oil prices extended declines on Monday, pressured by investor scepticism over the latest OPEC+ decision on supply cuts and uncertainty surrounding global fuel demand, though the risk of supply disruptions from the Middle East conflict limited losses.

Natural rubber often takes direction from oil prices, as it competes for market share with synthetic rubber, which is made from crude oil. The front-month rubber contract on Singapore Exchange’s SICOM platform for January delivery last traded at 142.5 US cents per kg, down 0.9%.