Japanese rubber futures range-bound

SHANGHAI: Japanese rubber futures traded in a tight range on Tuesday as weaker-than-expected economic data from top consumer China weighed on sentiment, while higher oil prices on renewed Middle East supply concerns lent some support to the market.

The Osaka Exchange (OSE) rubber contract for January delivery was down 0.5 yen, or 0.12percent, at 427.80 yen (USD2.68) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery fell 65 yuan, or 0.36percent, to 18,035 yuan (USD2,674.82) per metric ton.

The most active October butadiene rubber contract on the SHFE rose 480 yuan, or 3.43percent, to 14,455 yuan per ton. China’s economy lost momentum at the start of the second half, with industrial output and retail sales slowing as extreme weather disruptions and persistently weak domestic demand renew pressure on policymakers to step up stimulus.

Factory output grew 4.5percent from a year earlier last month, compared with 5.3percent in June, data from the National Bureau of Statistics showed on Monday, missing a Reuters poll forecast of 4.8percent growth.

China is the world’s largest rubber consumer, and signs of a broader economic slowdown tend to weigh on sentiment. Oil prices rose for a third session on Tuesday as prospects receded for a deal to end the Middle East war, with Iran saying it would adopt a more offensive stance and the US ruling out extending a ceasefire deal, heightening worries about energy supply.

Natural rubber often tracks oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The front-month rubber contract on Singapore Exchange’s SICOM platform for November delivery last traded at 221.9 US cents per kg, up 0.1percent as of 0704 GMT.