SHANGHAI: Japanese rubber futures rose on Tuesday as excessive rain in top producer Thailand raised worries over supplies. The Osaka Exchange (OSE) rubber contract for December delivery rose 2.2 yen, or 0.71%, to 311.8 yen ($2.18) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery increased 85 yuan, or 0.61%, to 14,095 yuan ($1,968.08) per metric ton. The most active August butadiene rubber contract on the SHFE fell 10 yuan, or 0.09%, to 11,260 yuan ($1,572.23) per metric ton.
Top rubber producer Thailand’s meteorological agency warned of heavy rain and floods from July 1-6. “The persistent rainfall across Thailand this week is expected to impact supply, thereby providing support to raw material prices,” a Singapore-based trader said. Car dealers in China are urging automakers to change their sales strategies amid a price war that is forcing the sale of new cars below cost.
Automobile sales influence rubber prices as vehicles use rubber tyres. However, a price war could be bearish for the market. The yen firmed to 143.77 yen per dollar, making yen-denominated assets less affordable for overseas buyers.
Japan’s Nikkei dipped 1.24% on uncertainty around US-Japan trade talks. The front-month rubber contract on the Singapore Exchange’s SICOM platform for August delivery last traded at 165.3 US cents per kg, up 1.1%.
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