NR futures continue slide on weak China credit rating

Tokyo – Natural rubber futures closed the trading week ended 8 Dec lower across all exchanges, according to Japan Stock Exchange (JPX).

Markets experience “another week of long liquidation and speculative selling” as traders reduced positions ahead of the year-end holidays, JPX reported 11 Dec.

In Osaka, Japan, OSE’s new active May-2024 rubber contracts fell 7.5% week-on-week, due to long liquidation.

In China, rubber contracts lost 2.0% and 0.8% respectively on the SHFE and INE exchanges, "reflecting reduced positions."

Meanwhile, Singapore’s SICOM rubber closed marginally lower, with some long positions being closed out, said the weekly review.

According to JPX, the decline in rubber prices accelerated after Moody's downgraded China's credit rating outlook from stable to negative.

In a 5 Dec report, Moody’s cited concerns over a deepening property crisis, rising government debt and a weakened stock market for the rating adjustment.

The US rating agency has projected China's economic growth to be at 4% between 2024 and 2025.

Meanwhile in Japan, third quarter GDP was 2.9% lower than at the same time last year, with the Bank of Japan hinting at a potential end to its negative interest-rate policy.

Selected NR futures price trends on major trading exchanges