Japanese rubber futures slip on firmer supply prospects, soft China
SINGAPORE: Japanese rubber futures eased on Tuesday on a firmer supply outlook amid seasonal harvesting, while muted Chinese economic data also pressured prices.
The Osaka Exchange (OSE) rubber contract for October delivery was down 1.2 yen, or 0.37%, at 323.3 yen ($2.24) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery dipped 15 yuan, or 0.1%, to 14,940 yuan ($2,068.74) per metric ton.
The most active June butadiene rubber contract on the SHFE fell 185 yuan, or 1.51%, to 12,070 yuan ($1,671.33) per metric ton. The prompt reversal in prices could indicate that the overall demand is weak, and uncertainty still remains amidst tariffs and as more supply comes on post-wintering, said Farah Miller, founder of independent rubber-focused data firm Helixtap Technologies.
Rubber crops usually undergo a season of low production from February to May, before a peak harvesting period that lasts until September. Still, excessive rainfall in overseas production areas interfered with the start of tapping, said broker Everbright Futures.
Thailand's meteorological agency warned of heavy rains and accumulations that could lead to flash floods, with the southwest monsoon strengthening from May 22-26. * Sentiment was also hit by slowing growth in China's factory output and retail sales numbers that missed expectations.
Meanwhile, Japan's Nikkei share average climbed on Tuesday, supported by a pause in the yen's rally that lifted automakers and other export-oriented stocks. Toyota added 1.2% and Mazda jumped 5%.
The front-month rubber contract on Singapore Exchange's SICOM platform for June delivery last traded at 172.5 US cents per kg, down 0.2%.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
12 minutes ago
- Business Recorder
Super-long JGB yields rise after weak auction, reversing earlier declines
TOKYO: Long-dated Japanese government bond yields rose briefly on Thursday, reversing earlier declines, following weak demand at a government auction of the debt. The Ministry of Finance received bids worth 897.8 billion yen ($6.24 billion) and sold 449.8 billion yen of debt in a so-called liquidity enhancement auction for JGBs with 15.5-39 years left to maturity. The demand was much lower than the previous sale in April, when the finance ministry received 1.555 trillion yen in bids and sold 649.3 billion yen of bonds. The 20-year JGB yield advanced 1.5 basis points (bps) to 2.395% immediately following the announcement of the auction results, before falling again to be down 0.5 bp as of 0423 GMT. The 30-year yield briefly flipped to a 0.5 bp rise but was last 1 bp lower at 2.905%. 'The liquidity supply auction yielded a distinctly lackluster result, underscoring the market's subdued appetite for super-long positions,' said Shoki Omori, chief desk strategist at Mizuho Securities. JGB yields track US peers higher after resilient labour data 'Although this outcome was generally within the expected range, it nevertheless highlighted the lingering vulnerability and volatility in the super-long segment.' Yields on 30-year JGBs surged to record highs last month, and 20-year yields spiked to quarter-century peaks, as investors turned skittish on the fiscal outlook for Japan and other developed economies. The rise was exacerbated by reduced appetite for the debt from life insurers and other traditional domestic buyers. The finance ministry injected some calm into the market with a pledge to adjust the size of super-long JGB issuances, but there are no details on how much the government will pare that back and which shorter-dated tenors will see increased issuance as a result. JGB yields began the day by falling, tracking overnight moves in U.S. Treasury yields. The 10-year JGB yield fell 1 bp to 1.445%. The five-year yield was down 1 bp at 1.005%, and the two-year yield was flat at 0.75%.
Business Recorder
12 minutes ago
- Business Recorder
Iron ore consolidates, market awaits clarity on Sino-US trade talk progress
BEIJING: Iron ore futures prices were range-bound on Thursday, as investors awaited more details on the trade talks between the U.S. and China, even as U.S. President Donald Trump struck a positive note. The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) closed the morning trade 0.07% lower at 705 yuan ($98.16) a metric ton. The benchmark July iron ore on the Singapore Exchange dipped 0.53% to $94.6 a ton, as of 0400 GMT. Trump on Wednesday said he was very happy with a trade deal that restored a fragile truce in the U.S.-China trade war. But Beijing has not confirmed the progress on the trade talks. 'If both countries could finalise a deal, it's definitely good news as it will remove some uncertainty for the export business; but at the same time, it may reduce the possibility of more stimulus (by Beijing),' said a steel mill manager on condition of anonymity. Focus has temporarily shifted to the weakening fundamentals before there is more clarity on Sino-U.S. trade talks, said Ge Xin, deputy director at consultancy Lange Steel. Iron ore rebounds as traders cheer Sino-US trade progress 'Steel output has been declining for two weeks, indicating lower consumption of raw materials, including iron ore,' Ge said Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 1.9% and 1.33%, respectively. Most steel benchmarks on the Shanghai Futures Exchange shed. Rebar lost 0.8%, hot-rolled coil fell 0.74%, wire rod dropped 0.72% while stainless steel added 0.76%.
Business Recorder
13 minutes ago
- Business Recorder
China's yuan ticks up as US-China trade truce lifts sentiment
SHANGHAI: China's yuan strengthened against the dollar on Thursday, as the latest trade truce between Washington and Beijing raised hopes that the world's two largest economies could avoid any further escalation in their tariff row. However, the gains were capped by a weaker-than-expected midpoint guidance fix, which markets interpreted as an official attempt to keep the yuan stable in the face of broad dollar weakness. Deepening deflationary pressure and slowing exports also dragged on the Chinese currency. U.S. President Donald Trump on Wednesday said he was very happy with a trade deal that restored a fragile truce in the U.S.-China trade war, a day after negotiators from Washington and Beijing agreed on a framework covering tariff rates. 'This was a conversation that enabled more conversations and prolong the trade truce,' Maybank analysts said in a note. 'However, there was little seen in terms of resolving core differences and issues such as national security, tariffs and technology race. There was little to suggest what can turn this trade truce a tad more permanent.' As of 0342 GMT, the onshore yuan was 0.13% higher at 7.1800 per dollar, while its offshore counterpart was up 0.24% in Asian trade to 7.1818. Yuan flat against US dollar after trade talks Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate at 7.1803 per dollar, its strongest since April 2. The spot yuan is allowed to trade 2% either side of the fixed midpoint each day. The central bank had set firmer-than-expected midpoint guidance rates on most of the days since November to prevent excess yuan weakness. However, Thursday's official guidance was 100 pips weaker than a Reuters' estimate of 7.1703, with some traders interpreting it as an attempt to prevent any large upswing in the yuan at a time of broader dollar weakness. Overnight, a milder U.S. inflation report for May led traders to ramp up bets of a Federal Reserve rate cut as early as September, keeping pressure on the dollar. Also, a slew of recent Chinese economic data, including inflation and trade, pointed to a slowing economy and may not support a strong yuan in the near term, traders and analysts said. 'Economic momentum remains weak, amid persistent deflation, while exports remain the main engine of growth,' FX analysts at Barclays said in a note. 'We continue to see yuan depreciation as a necessary release valve alongside incremental fiscal and monetary policy easing.' Hu Yifan, regional chief investment officer and chief China economist at UBS Global Wealth Management, expects a loose monetary policy stance to be maintained for the remainder of this year. 'We think there will be another 50 to 100 basis points of reserve requirement ratio (RRR) cuts in the second half of this year, and interest rates to be reduced by 20 to 30 basis points, due to low inflation,' Hu said. 'If tariffs are lowered, fiscal policy may not be needed, and China may not want to use up all its firepower.'
