By Emily Ou Yong
Japanese rubber futures fell on Thursday, as a sharp deterioration in China's auto sales outlook dimmed demand prospects, while a drop in oil prices to their lowest since March added further pressure.
The Osaka Exchange (OSE) rubber contract for December delivery TOCOM:TRB1!, TOCOM:TRB1! was down 1.7 yen, or 0.41%, at 411.7 yen ($2.53) per kg as of 0155 GMT.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery SHFE:RU1! fell 5 yuan, or 0.03%, to 16,700 yuan ($2,461.06) per metric ton.
The most active September butadiene rubber contract on the SHFE (SHBRv1) shed 230 yuan, or 1.92%, to 11,760 yuan per metric ton.
The price of Thailand's benchmark export-grade smoked rubber sheet (RSS3) (RUB-RSS3C-BKK) and block rubber (RUB-STR20C-BKK) was down 1.03% and 2.6%, at 92.05 baht per kg and 77.52 baht per kg, respectively.
Oil prices fell more than 1% on Wednesday to their lowest levels since March as optimism over U.S.-Iran talks allayed supply concerns after U.S. President Donald Trump said talks in Qatar had gone well.
Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil.
Chinese electric vehicle maker BYD's domestic sales fell 22% year-on-year, weighed by fading policy support following subsidy cuts, a prolonged property market slump that has hurt household wealth and confidence, and elevated dealer inventories.
Car sales in China, the world's largest auto market, are forecast to fall 11% this year, a sharp decline from a previously estimated 1% decline, according to the China Passenger Car Association.
Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres.
The front-month rubber contract on Singapore Exchange's SICOM platform for August delivery SGX:TF1! last traded at 209.1 U.S. cents per kg, down 0.1%.
($1 = 162.5100 yen)
($1 = 6.7857 Chinese yuan)