SINGAPORE: Japanese rubber futures declined for a third straight session to close at a seven-week low on Thursday, tracking Shanghai’s losses amid lower demand prospects, and as a slowdown in tyre production in China ahead of a long holiday weighed.
The Osaka Exchange (OSE) rubber contract for October delivery closed down 3.4 yen, or 1.11%, at 302.1 yen ($1.94) per kg, the lowest since March 8.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 170 yuan to finish at 14,045 yuan ($1,938.07) per metric ton.
“Abnormally weak demand from China and concerns over demand prospects from the U.S.” has prompted heavy sell-offs in SHFE natural rubber futures contracts, dragging down OSE and SICOM prices, said Jom Jacob, co-founder of India-based analysis firm What Next Rubber.
Some tyre manufacturers in China have decreased production to prepare for the upcoming May Day holidays, China-based Beite Futures said in a note.
U.S. business activity cooled in April to a four-month low due to weaker demand.
Investor focus will be on the upcoming first quarter U.S. gross domestic product data and March personal consumption expenditures.
Toyota Motor will delay the start of its electric vehicle production in the U.S. and, on the other hand, reduce domestic vehicle production to less than 14,000 vehicles per day by September, the Mid Japan Economist newspaper said on Thursday.
Car production in Southeast Asia’s auto hub Thailand dropped 23.08% in March year-on-year to 138,331 units, the Federation of Thai Industries said.
Japan’s benchmark Nikkei average fell 2%.
The front-month rubber contract on Singapore Exchange’s SICOM platform for May delivery last traded at 158.8 U.S. cents per kg, down 1%.