SINGAPORE: Japanese rubber futures logged a weekly gain on supply concerns across major producing regions, even as muted Chinese economic prospects dimmed the top consumer’s demand outlook and dragged prices lower on Friday. The Osaka Exchange (OSE) rubber contract for February delivery closed down 6.7 yen, or 1.79%, at 366.7 yen ($2.56) per kg.

The contract gained 2.17% for the week. The January rubber contract on the Shanghai Futures Exchange (SHFE) rose 20 yuan, or 0.11%, to 17,875 yuan ($2,534.89) per metric ton. This week’s uptrend in natural rubber was supported by concerns over worsening supply in major Southeast Asian exporting countries, said Jom Jacob, chief analyst at Indian analysis firm What Next Rubber.

Jacob said supply was hit by the shrinking area of rubber-yielding trees, adverse effects of widespread leaf diseases, and recent labour shortages and wage hikes among farmers.

Chinese manufacturing companies and traders are expected to actively buy natural rubber ahead of the Golden Week holiday from Oct. 1-7, given abnormally low Qingdao inventories Qingdao and sharp falls in domestic production caused by Typhoon Yagi, added Jacob.

There was likely some profit-taking today before the weekend and after sharp moves up, and as tyre majors were sidelined this week, said Farah Miller, CEO of independent rubber-focused data firm Helixtap Technologies.

China unexpectedly left lending rates unchanged at its monthly fixing, confounding market expectations that were primed for a move after the Fed’s outsized interest rate cut earlier this week.

Analysts still expect Chinese policymakers to step up measures to help the economy meet its increasingly challenging 2024 growth target, with a sharper focus on boosting demand to fight persistent deflationary pressures, as a string of August economic data surprised to the downside.

The front-month October rubber contract on Singapore Exchange’s SICOM platform last traded at 195.1 US cents per kg, down 0.8%.