Benchmark Tokyo rubber futures slid to a five-week low on Tuesday as a drop in Shanghai futures prompted fresh selling and amid worries about lower demand for tyre due to US President Donald Trump's threat to impose tariffs on auto imports. Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, are under pressure on anticipation that tyre demand in Japan will shrink if Trump slaps new import duties, said Toshitaka Tazawa, an analyst at commodities broker Fujitomi Co.
The TOCOM rubber contract for November delivery finished 3.2 yen, or 1.7 percent, lower at 187.2 yen ($1.7) per kg. It earlier touched the lowest since May 1 of 186.3 yen. The most-active rubber contract on the Shanghai futures exchange for September delivery fell 110 yuan to finish at 11,605 yuan ($1,812) per tonne, after dipping to as low as 11,455 yen, the lowest in about two weeks.
The front-month rubber contract on Singapore's SICOM exchange for July delivery last traded at 141.9 US cents per kg, unchanged from the previous day. The Trump administration has launched a national security investigation into car and truck imports that could lead to new US tariffs similar to those imposed on imported steel and aluminium in March. Higher tariffs could be particularly painful for Asian automakers, including Toyota Motor, Nissan Motor, Honda Motor and Hyundai Motor, which count the United States as a key market.
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