Japan futures flat as raw material costs offset weak China demand

By Reuters News

By Emily Ou Yong

Oct 1 (Reuters) - Japanese rubber futures traded in a narrow range on Thursday, as firm raw material costs from rainfall disruption in producing regions countered weak demand from tyre manufacturers in top rubber consumer China.

  • The Osaka Exchange (OSE) rubber contract for March delivery , edged 0.6 yen lower, or 0.13%, at 452.3 yen ($2.86) per kg as of 0150 GMT.

  • The Shanghai Futures Exchange will be closed from October 1 to 7 for China's National Day holiday, the bourse said. Trading will resume on Thursday, October 8.

  • Rainfall in China's Hainan and Yunnan has hindered short-term raw material procurement domestically, while a rebound in rainfall in Thailand has kept latex and cup lump prices firm, analysts from broker Ningzheng Futures said in a note.

  • Low all-steel tyre inventories and continued destocking in Qingdao are providing further support, the analysts said.

  • Pre-holiday stockpiling has now concluded and pressure on tyre manufacturers' profits may limit any improvement in demand, said analysts from broker Zhongcai Futures in a note.

  • Elsewhere, floods in Thailand have disrupted parts deliveries to Toyota's 7203.T Thai unit and caused the temporary shutdown of four of its plants.

  • The price of Thailand's benchmark export-grade smoked rubber sheet (RSS3) was up 1.83%, while block rubber was down 1.38%.

  • The front-month rubber contract on Singapore Exchange's SICOM platform for December delivery was last flat at 254.5 US cents per kg.

($1 = 158.0700 yen)

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