SINGAPORE: Japanese rubber futures were largely unchanged on Monday, as dismal Chinese economic data raised concerns over demand in top consumer of the tyre-making ingredient, though a weaker yen limited losses.

The Osaka Exchange (OSE) rubber contract for December delivery closed down 0.1 yen at 328.4 yen ($2.04) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery reversed losses to close up 65 yuan at 15,010 yuan ($2,065.30) per metric ton. Factory activity among smaller Chinese manufacturers grew at the fastest pace since 2021 thanks to overseas orders, a private index showed, even as a broader survey indicated weak domestic demand and trade frictions had led to another industrial sector contraction. China’s soft manufacturing data “adds to worries” over its “persistent weak demand” for natural rubber, said Jom Jacob, chief analyst at Indian analysis firm What Next Rubber.

Physical markets for natural rubber in the major exporting countries are “dominated by an almost muted sentiment”, Jacob said. The price of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) fell 0.79 Thai baht, or 1%, to 78.43 baht ($2.14) per kg, according to LSEG data.

The yen hovered around a 38-year low after data showed Japan’s economy shrank more than initially reported in the first quarter, leaving traders on alert for signs of intervention to prop up the currency.

Osaka futures seemed to be supported by the yen’s weakness, said Desmond Wan, trader at international rubber supplier Southland Global.