SINGAPORE: Japanese rubber futures declined for a third session to close lower on Friday, amid demand concerns from top consumer China and as the end of the wintering season nears.
The Osaka Exchange (OSE) rubber contract for September delivery closed down 9.6 yen, or 2.95%, at 315.7 yen ($2.06), the lowest close since March 26. The contract lost 2.92% weekly. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 185 yuan to finish at 14,695 yuan ($2,030.51) per metric ton.
Prices are normalizing ahead of the end of wintering in major producing regions, including Thailand, Vietnam and Ivory Coast, said Farah Miller, CEO of Helixtap Technologies, an independent rubber-focused data company.
“Before Songkran factory closures, it was also noted that several Thai processors sold quite heavily with the futures uptick on Monday to take advantage of the initial bullish sentiment,” Miller added. “Uncertainty persists regarding demand from China and with the peak season for raw materials starting in May, a cautious market sentiment prevails,” a Singapore-based trader said.
China’s consumer price index fell 1% month-on-month while producer price deflation persisted, pointing to still weak demand despite signs that the struggling economy is regaining some momentum.
China remains a weight on the regional growth outlook as a protracted property crisis and other challenges keep the world’s No.2 economy from mounting a strong economic revival, the Asian Development Bank said on Thursday. Japan’s benchmark Nikkei average closed 0.21% higher.
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