Japan futures snaps two-day winning streak on demand uncertainty

Updates closing prices, adds analyst comment and details

SINGAPORE, May 9 (Reuters) –

Japanese rubber futures snapped a two-day winning streak to close lower on Thursday amid demand uncertainty, although higher oil prices limited losses.
The Osaka Exchange (OSE) rubber contract for October delivery JRUc6, 0#2JRU: closed down 0.5yen, or 0.16%,at 309.3 yen ($1.99) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery SNRv1 fell 80 yuan to finishat 14,240 yuan ($1,970.72)per metric ton.
Uncertainty around the ongoing elections in India could hurt automakers’ sales in May despite rising consumer interest for new model launches, a dealers’ body said.
Top executives at BMW and Volkswagen warned against imposing EU import duties on electric vehicles from Chinese automakers, saying it could upend the bloc’s Green Deal plan and harm automakers that import cars made in China.
Lower automobile sales are likely to dent demand for tyres, which are made of rubber.
Meanwhile, China’s exports and imports returned to growth in April after contracting in March. In April, rubber imports , however, fell 19.66% month-on-month and 15.6% year-on-year.
On the supply front, rubber prices may be dampened by an imminent seasonal supply rise as “farmers widely restart tapping by next week”, said Jom Jacob, co-founder of India-based analysis firm What Next Rubber, noting that some market participants harbour the view that yield could be under pressure given the abnormally hot weather.
Thailand’s meteorological agency warned of heavy rains and flash floods in upper Thailand from May 8-14, potentially damaging crops.
Oil prices rose amid shrinkingU.S. crude inventories and rising hopes that the Federal Reserve would cut interest rates by the end of the year. O/R
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 the Singapore Exchange’s SICOM platform for June delivery STFc1 last traded at 163 U.S. cents per kg, down 0.1%.