SINGAPORE: Japanese rubber futures inched lower on Wednesday, tracking weaker domestic equities as weak demand for machinery products stoked continued concerns over a global economic slowdown and weighed on sentiment.

The Osaka Exchange rubber contract for June delivery was down 0.3 yen, or 0.1%, at 220.1 yen ($1.65) per kg as of 0205 GMT. The rubber contract on the Shanghai futures exchange for May delivery was up 90 yuan, or 0.7%, at 12,840 yuan ($1,843) per tonne. Japan’s benchmark Nikkei share average opened 0.52% lower.

Japanese factories slashed output for a third consecutive month in November, dragged down by weak demand for machinery products amid a deteriorating global economic outlook.

Rubber demand sentiment has been mixed in recent weeks after top buyer China relaxed strict Covid-19 curbs, which was met with a fresh wave of new infections, limiting industrial activity and consumption.

Tesla plans to run a reduced production schedule at its Shanghai plant in January, extending the reduced output it began this month into next year, according to an internal schedule reviewed by Reuters. Asian equities were subdued on Wednesday, while the dollar held firm as investors looked for direction as China takes further steps toward reopening its Covid-battered economy.

The front-month rubber contract on Singapore Exchange’s SICOM platform for January delivery last traded flat at 128.50 cents per kg.