SINGAPORE: Japanese rubber futures fell across major Asian exchanges on Friday and posted their first weekly decline following a six-week rally, pressured by subdued global demand and muted stimulus signals from China’s Politburo meeting.
The Osaka Exchange (OSE) rubber contract for January delivery was down 0.7 yen, or 0.22%, at 314.8 yen ($2.09) per kg. The contract has lost 5.09% so far this week. The rubber contract on the Shanghai Futures Exchange for September delivery dipped 410 yuan, or 2.79%, to 14,310 yuan ($1,985.07) per metric ton.
The most active September butadiene rubber contract on the SHFE fell 125 yuan, or 1.08%, to 11,455 yuan ($1,589.03) per metric ton. In July, factory activity declined across Asia as weak global demand and ongoing uncertainty over US tariffs weighed on sentiment, PMI data showed.
This week’s highly anticipated Politburo meeting delivered no major policy shifts, as leaders reiterated their commitment to supporting the economy by regulating “disorderly competition”, but showed no sense of urgency to roll out major stimulus.
Meanwhile, top rubber producer Thailand’s meteorological agency forecasted less rain from August 1 to 4. The yen fell to 150.73 per dollar as US President Donald Trump imposed a new wave of tariffs.
A weaker currency makes yen-denominated assets more affordable to overseas buyers. Japan will continue to push the US to implement a cut in automobile tariffs to 15% from 25%, a concession that European automakers have already secured, though major companies like Volkswagen, Porsche, and Mercedes-Benz have revised their outlooks downward.
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 last traded at 164.2 US cents per kg, down 1%.
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