Japanese rubber futures were flat on Tuesday, weighed by lower-than-expected growth in China industrial output and retail sales, while traders monitored developments surrounding the ongoing debt ceiling negotiations.
The Osaka Exchange (OSE) rubber contract for October delivery was unchanged at 212.5 yen ($1.57) per kg, as of 0207 GMT. The rubber contract on the Shanghai futures exchange (SHFE) for September delivery was up 70 yuan, or 0.6%, at 12,315 yuan ($1,781.66) per tonne.
Japan’s benchmark Nikkei average opened up 0.71%. China’s April industrial output and retail sales growth undershot forecasts, suggesting the economy lost further momentum at the start of the second quarter and adding to the raft of recent data highlighting a wobbly post-COVID recovery. US President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy on Monday prepared for critical debt-ceiling talks, with a little more than two weeks to go before the US government could run short of money to pay its bills. On Monday, China’s central bank said it would keep liquidity reasonably ample and interest rates reasonable and appropriate, focusing on supporting domestic demand amid uncertainties. Oil prices rose early on Tuesday, as US plans to purchase oil for the Strategic Petroleum Reserve lent support while raging wildfires in Canada fuelled supply worries. Higher oil prices disincentivise manufacturers from shifting to synthetic rubber, which is derived from oil, helping the natural rubber market.
Asian stocks opened higher on Tuesday despite weaker-than-expected China economic data. The front-month rubber contract on Singapore Exchange’s SICOM platform for June delivery last traded at 137.0 US cents per kg, down 0.3%.
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