SINGAPORE: Japanese rubber futures fell on Wednesday, as fears of a prolonged price war in China’s automobile market weakened sentiment for the tire-making material.
The Osaka Exchange (OSE) rubber contract for November delivery was down 4.6 yen, or 1.41%, at 321.3 yen ($2.23) per kg as of 0216 GMT. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery slumped 340 yuan, or 2.36%, to 14,095 yuan ($1,957.42) per metric ton.
The most active June butadiene rubber contract on the SHFE fell 260 yuan, or 2.24%, to 11,325 yuan ($1,572.74) per ton. An intensifying auto industry price war in China has stoked fears of a long-anticipated shake-out in the world’s largest car market, following Chinese electric-vehicle giant BYD’s fresh discounts across more than a dozen models.
On Friday, Great Wall Motors Chairman Wei Jianjun warned that China’s auto sector was in an unhealthy state, with pricing pressure hammering the bottom lines of car companies and suppliers. Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres.
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