Japanese rubber futures edged lower on Wednesday after a five-session rally, as investors weighed weaker physical rubber prices and disappointing Chinese economic data against rising oil prices. The Osaka Exchange (OSE) January rubber contract fell by 1 yen, or 0.31%, to 322.3 yen ($2.20) per kilogram. Similarly, the Shanghai Futures Exchange (SHFE) January rubber contract decreased by 145 yuan, or 0.91%, to 15,870 yuan ($2,218.59) per metric ton. Thailand’s benchmark export-grade smoked rubber sheet (RSS3) also dropped by 1.26% to 85.33 baht ($2.44).
In China, bank lending plunged more than anticipated in July, reaching a 15-year low due to sluggish credit demand and seasonal factors. This downturn in lending, combined with disappointing economic growth and weak July economic indicators, has intensified expectations for additional central bank easing.
Meanwhile, oil prices rose on expectations of reduced U.S. crude and gasoline inventories and concerns over potential disruptions in the Middle Eastern oil supply. Natural rubber prices are often influenced by oil prices as it competes with synthetic rubber derived from crude oil. The Japanese yen held steady at 147.06 against the dollar, with the currency consolidating around this level following favorable U.S. producer price data which supported expectations of interest rate cuts. The September rubber contract on Singapore Exchange’s SICOM platform last traded at $171.5 per kilogram.
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