SINGAPORE: Japanese rubber futures fell for a fifth consecutive session on Monday as the yen strengthened, while deflationary pressures in top consumer China fuelled slowdown concerns.
The Osaka Exchange (OSE) rubber contract for August delivery closed down 6.6 yen, or 1.89%, at 343.1 yen ($2.32) per kg.
The contract fell to 341.3 yen earlier in the session, its lowest point since November 14. The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery fell 375 yuan, or 2.15%, to 17,100 yuan ($2,356.02) per metric ton. The most-active April butadiene rubber contract on the SHFE shed 295 yuan, or 2.15%, to 13,400 yuan ($1,846.24) per metric ton.
China’s consumer price index in February missed expectations and fell at the sharpest pace in 13 months, while producer price deflation persisted, as households remain cautious about spending. The country’s imports unexpectedly shrank during the January-February period, while exports lost momentum, amid escalating tariff pressures from the United States.
Meanwhile, risk-averse investors sought the Japanese yen, with the currency 0.25% firmer at 147.68 per dollar, just shy of a five-month high.
A stronger yen makes assets denominated in the currency less affordable to overseas buyers. Oil prices fell as concerns over the potential impact of US import tariffs on global economic growth and fuel demand, as well as rising output from OPEC+ producers, cooled investor appetite for riskier assets.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. Farmers should be wary of crop damage from March 12-13, top rubber producer Thailand’s meteorological agency said, adding that the South would face thundershowers and isolated heavy rains.
