SINGAPORE: Japanese rubber futures fell on Monday, tracking losses in the Shanghai market, while lower crude prices dampened their appeal and discouraged a switch to natural rubber from synthetic rubber, which is derived from oil.

The Osaka Exchange rubber contract for August delivery finished 3.5 yen, or 1.4%, lower at 240.6 yen ($2.04) per kg.

Oil prices shed as much as $4 a barrel, extending last week’s decline as diplomatic efforts to end the war in Ukraine geared up and markets braced for higher US interest rates.

An alleged cybercrime group released a statement on Sunday saying it had stolen classified information from Toyota Motor Corp’s main supplier Denso and will release it on the dark web, Japan’s public broadcaster NHK reported.

The rubber contract on the Shanghai futures exchange for May delivery was down 445 yuan at 13,455 yuan ($2,116.20) per tonne. Earlier in the session, it fell by 3.3%, marking its biggest percentage decrease since Oct. 22.

The current spike in COVID-19 cases in China has halted production at some companies such as tyre manufacturers, which means lower demand for rubber, a Singapore-based trader said.

“With weaker oil prices and news of lockdowns in China, traders are quite bearish,” he said.

China has reported more local symptomatic COVID-19 cases so far this year than it recorded in all of 2021, as the highly transmissible Omicron variant triggers outbreaks from Shanghai to Shenzhen.

Volkswagen Group China said production at plants in China’s Changchun city had been suspended from Monday to Wednesday due to COVID outbreaks.

The front-month rubber contract on Singapore Exchange’s SICOM platform for April delivery last traded at 172.4 US cents per kg, down 2.9%.