NR futures continue downward trend as economy concerns rise

TOKYO—World rubber future prices continued on a downward track last week, burdened by concerns over China and the wider global economy.

Rubber futures closed the trading week to July 22 generally lower in mixed trading on major rubber exchanges, according to the latest Japan Exchange Group (JPX) report.

On the Osaka Stock Exchange, rubber futures closed 2 percent lower with light trading volume, with JPX also noting a renewed speculative selling.

On the Shanghai Futures Exchange futures dropped by 2 percent "due to long liquidation with smaller trading volume," according to the weekly report.

In Singapore, JPX reported that SICOM futures fell 1.1 percent last week amid active speculative selling after the price broke the critical support level.

"Concern over weak rubber demand in China and its ailing economy stemming from lockdowns have put pressure on world rubber prices in recent weeks," said the review.

"The Chinese government showed concern about its third quarter GDP growth and is working hard to push the economy after a miserable second quarter GDP growth outcome of 0.4 percent," said JPX.

On a brighter note, it reported that China's total vehicle sales had increased by 34.4 percent to 2.5 million units at the end of June.

On the global stage, JPX reported that global equities markets had closed the week higher as inflation pressure eased on falls in crude oil and commodities prices.

However, JPX also noted that the European Central Bank had raised its key interest rate by 0.5 percentage points—its first hike in 11 years.

Further pressure on rubber markets looks set to stem from the U.S., where the Fed is set to raise the interest rate on July 27, the Japanese group pointed out.