Japanese rubber futures edged lower on Monday, weighed down by softer oil prices and a muted demand outlook from top consumer China, although firmer synthetic rubber prices lent some support to the market.
The Osaka Exchange (OSE) rubber contract for January delivery was down 1.3 yen, or 0.4%, at 327.6 yen ($2.22) per kg as of 0216 GMT.
The January rubber contract on the Shanghai Futures Exchange (SHFE) was up 40 yuan, or 0.25%, to 16,135 yuan ($2,256.01) per metric ton.
The most active October butadiene rubber contract on the SHFE (SHBRv1) rose 95 yuan, or 0.66%, to 14,395 yuan ($2,012.72) per metric ton.
Oil prices eased on Monday as fears of weaker demand in top importer China weighed on market sentiment, while investors focussed on the progress of ceasefire talks in the Middle East, which could reduce supply risks.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Another round of weak Chinese economic data is raising pressure on Beijing to loosen the fiscal spigot further and even dole out shopping vouchers to get growth back towards this year’s target of roughly 5%.
The yen was last 0.2% lower at 147.93 a dollar, having fallen some 4% from a seven-month high at the start of the month.
A weaker Japanese currency makes yen-denominated assets more affordable to overseas buyers.
The trading range for the Osaka rubber contract this week is expected to remain steady but quiet, as strong buying interest is still lacking, Japan Exchange Group said in a report.
The front-month September rubber contract on Singapore Exchange’s SICOM platform last traded at 173.7 U.S. cents per kg, up 0.5%.
($1 = 147.5200 yen)
($1 = 7.1520 yuan)
