SINGAPORE, Oct 17 (Reuters) –
-
Japanese rubber futures ended flat on Thursday, as investors assessed the impact of a delay in a key EU deforestation law, while a lack of fresh stimulus from a key policy briefing in top consumer China also weighed on prices.
-
The March Osaka Exchange (OSE) rubber contract JRUc6, 0#2JRU: closed flat at 385.5 yen ($2.58) per kg.
-
The January rubber contract on the Shanghai Futures Exchange (SHFE) SNRv1 fell 325 yuan, or 1.8%, to 17,740 yuan ($2,489.44) per metric ton.
-
European Union ambassadors agreed on Wednesday to delay the implementation of the bloc’s landmark deforestation law by a year till the end of December 2025.
-
The law, known as EUDR, will require companies importing products, including rubber, to prove their supply chains did not contribute to the destruction of the world’s forests.
-
Companies that have paid to source agricultural produce complying with the law will lose out from the delay, industry groups and traders said.
-
As the EU parliament still needs to sign off on the law, the market is wondering if its final iteration would involve a 12-month delay or longer, said Farah Miller, founder of independent rubber-focused data firm Helixtap Technologies.
-
EUDR spot premiums will be lower, while traders will try to understand how to price cargoes loading in 2025, Miller said.
-
“These are all uncertainties which would make negotiation of spot and long-term contracts tricky for both buyers and sellers in the coming months,” Miller said.
-
China said it would expand a “white list” of housing projects eligible for financing and increase bank lending for such developments to 4 trillion yuan ($562 billion) by the year-end.
-
The front-month November rubber contract on Singapore Exchange’s SICOM platform STFc1 last traded at 195.4 U.S. cents per kg, down 0.4%.
($1 = 149.6900 yen)
($1 = 7.1261 yuan)
Reporting by Gabrielle Ng; Editing by Sumana Nandy and Subhranshu Sahu
