SINGAPORE: Japanese rubber futures fell to a one-week low on Tuesday, weighed down by a batch of softer Chinese economic data and as Beijing’s latest stimulus plan disappointed investors.
The April Osaka Exchange (OSE) rubber contract slid 17.2 yen, or 4.73%, to finish at 346.8 yen ($2.26) per kg, its weakest level since Nov. 5.
The January rubber contract on the Shanghai Futures Exchange (SHFE) closed down 450 yuan, or 2.45%, at 17,905 yuan ($2,474.95) per metric ton. It earlier fell as much as 3%. The most-active January butadiene rubber contract on the SHFE tumbled 505 yuan, or 3.61%, to 13,485 yuan ($1,863.99) per ton.
A sharp drop across futures markets on Tuesday kept many market participants away, which could indicate that many were hoping for a larger stimulus package from China, said Farah Miller, founder of independent rubber-focused data firm Helixtap Technologies.
Top consumer China unveiled a 10 trillion yuan debt package on Friday to ease local government financing strains and stabilise flagging economic growth, as it faces fresh pressure from the re-election of Donald Trump as US president.
China’s new bank lending tumbled more than expected to a three-month low in October, data showed on Monday, as the ramp-up of policy stimulus failed to boost credit demand.
Oil prices were little changed on Tuesday, awaiting further price direction from OPEC’s monthly report, with investor disappointment over China’s latest stimulus plan and oversupply concerns keeping buying interest at bay.
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 December rubber contract on Singapore Exchange’s SICOM platform last traded at 191.3 US cents per kg, down 2.3%.
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