SHANGHAI: Japanese rubber futures eased on Tuesday, as data showing rising inventory pressure among Chinese auto dealers pointed to softening demand.
The Osaka Exchange (OSE) rubber contract for February delivery was down 4.4 yen, or 1percent, at 437.1 yen (USD2.73) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery fell 85 yuan, or 0.45percent, to 18,790 yuan (USD2,795.92) per metric ton.
The most active October butadiene rubber contract on the SHFE rose 275 yuan, or 1.87percent, to 14,945 yuan per metric ton.
China’s Vehicle Inventory Alert Index rose to 62.3percent in August, up 5.3 percentage points year-on-year and 1.2 percentage points month-on-month, remaining above the 50percent threshold that signals excess inventory, latest data from the China Automobile Dealers Association showed.
The downstream tire industry’s operating rate in top rubber producer China remains stable, though companies are sticking to essential natural rubber purchases, analysts from broker Shanghai Zhongqi Futures said in a note.
End-user demand remains only moderate and purchasing sentiment cautious, which may cap further price gains, analysts from broker Gelin Dahua said in a note.
Production is projected to rise 2.1percent to 15.28 million tons and consumption 0.4percent to 15.36 million tons, leaving the market in a slight deficit for the rest of the year, data from the Association of Natural Rubber Producing Countries (ANRPC) showed in its latest report.
The front-month rubber contract on Singapore Exchange’s SICOM platform for November delivery last traded at 234.6 US cents per kg, down 0.8percent as of 0705 GMT.