Japanese rubber futures fell on Tuesday, pressured by a stronger yen and prolonged price war in China’s automobile sector, which continues to weigh on rubber prices.
The Osaka Exchange (OSE) rubber contract for January delivery ended daytime trade down 4.1 yen, or 1.26%, at 321.9 yen ($2.17) per kg.
- The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery lost 230 yuan, or 1.51%, to 15,010 yuan ($2,091.61) per metric ton.
The most active September butadiene rubber contract on the SHFE fell 290 yuan, or 2.39%, to 11,835 yuan($1,649.18) per metric ton.
A Reuters analysis of consumer complaints found widespread inflation of sales figures by Chinese automakers and dealers, a tactic used to boost car sales numbers amid a prolonged price war in the world’s largest auto market.
This approach masks the true level of inventory held by automakers, potentially causing them to overestimate monthly demand and schedule higher production.
Japanese rubber slips on profit-taking
Lower automobile prices, driven by fierce competition, exert a downward pressure on rubber tyre prices.
Meanwhile, the yen edged up to 148.22 per dollar.
A stronger currency makes yen-denominated assets less affordable to overseas buyers.
Still, top rubber producer Thailand’s meteorological agency warned of heavy rains and accumulations on July 29.
Elsewhere, top producer Thailand and Cambodia agreed to a ceasefire on Monday after five days of intense fighting. However, Thailand later accused Cambodian troops of multiple attacks in violation of the agreement.
front-month rubber contract on Singapore Exchange’s SICOM platform for August delivery last traded at 168.5 U.S. cents per kg, down 1.1%.
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