SINGAPORE: Japanese rubber futures inched higher on Friday, but were on track for a third consecutive weekly loss as traders fretted about a cloudy global economic outlook and oil prices extended falls.
The Osaka Exchange (OSE) rubber contract for August delivery was up 1.7 yen, or 0.8%, at 205.8 yen ($1.58) per kg, as of 0217 GMT. For the week, the contract has dropped about 1.3%.
The rubber contract on the Shanghai futures exchange (SHFE) for May delivery was down 10 yuan, or 0.1%, at 11,710 yuan ($1,711.24) per tonne. Japan’s benchmark Nikkei average opened down 0.19%.
Japan’s manufacturing activity contracted for a fifth straight month in March as output and new orders remained under pressure, a survey showed, suggesting the economic recovery is fragile as global demand slows.
China will make efforts to stabilise automobile, consumer electronics consumption, and expand home appliances and green building materials consumption, the Ministry of Industry and Information Technology said on Thursday.
Oil prices fell, extending the previous day’s losses, on worries about potential oversupply after US Energy Secretary Jennifer Granholm said refilling the country’s Strategic Petroleum Reserve may take several years.
Lower oil prices incentivise manufacturers to shift to synthetic rubber which is derived from oil, weighing on the natural rubber market. Asian shares were lower as lingering banking stability concerns gripped Wall Street, while bonds bet the recent slew of rate hikes by central banks will be among the last of the cycle, allowing for policy relief later in the year.
The front-month rubber contract on Singapore Exchange’s SICOM platform for April delivery last traded at 130.8 US cents per kg, up 0.1%.
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