SINGAPORE: Japanese rubber futures fell on Tuesday, weighed by concerns over a delay in the implementation of a key European Union deforestation law, while fizzling enthusiasm over top consumer China’s stimulus measures also added pressure. The Osaka Exchange (OSE) rubber contract for March delivery closed down 8.3 yen or 2.05%, at 395.6 yen ($2.67) per kg.
The January rubber contract on the Shanghai Futures Exchange (SHFE) fell 245 yuan, or 1.28%, to finish at 18,890 yuan ($2,676.09) per metric ton. “With the European Commission’s proposal for an EUDR deadline being delayed by an additional 12 months, prices corrected downwards as market participants were worried tyre manufacturers would delay or renovate premiums of EUDR cargoes,” said Farah Miller, CEO of independent rubber-focused data firm Helixtap Technologies. “As some Chinese traders return to the market, perhaps there was also some profit-taking,” Miller added.
The European Commission said last week it would propose to delay the implementation of its European Union Deforestation-free Products Regulation (EUDR) by a year. The law would require companies in the bloc from Dec. 30 to prove supply chains of their commodities, including rubber, do not contribute to deforestation.
China’s runaway stocks rally began losing steam on Tuesday as officials disappointed markets by providing few specific details on plans to bolster China’s slowing economy.
China is “fully confident” of achieving its full-year economic and social development targets, with some funds from 2025’s budget being brought forward to support projects, chairman of the country’s economic planner Zheng Shanjie said on Tuesday. Zheng said that to address insufficient domestic demand, policymakers will focus on enhancing people’s livelihood to stimulate consumption and investment. No further details were announced. The front-month October rubber contract on Singapore Exchange’s SICOM platform last traded at 203.7 US cents per kg, down 4.5%.
Comments
Comments are closed.