Japanese rubber futures slide on Thai baht strength, narrower auto margins

SINGAPORE: Japanese rubber futures fell on Thursday, weighed by Thailand’s stronger baht and mounting concerns over export competitiveness in the key auto production hub, which is squeezing automaker margins.

The Osaka Exchange (OSE) rubber contract for February delivery was down 5.5 yen, or 1.74 percent, at 310 yen (USD2.11) per kg as of 0227 GMT.

The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery dipped 295 yuan, or 1.86 percent, to 15,605 yuan (USD2,195.66) per metric ton.

The most-active October butadiene rubber contract on the SHFE fell 190 yuan, or 1.64 percent, to 11,430 yuan per metric ton. The strengthening of Thailand’s currency to a four-year high is threatening exports, making it more difficult for Thai manufacturers to compete with regional rivals like Vietnam, especially as they also contend with a 19percent tariff imposed by the US, Thailand’s largest export market. Thailand, Southeast Asia’s second-largest economy, serves as a key export hub in the region for leading Japanese carmakers like Toyota and Honda, as well as major Chinese EV brands.