SHANGHAI: Japanese rubber futures extended their declines on Thursday, pressured by a stronger yen and a sharp drop in car sales in China, the world’s top auto manufacturer.
The Osaka Exchange (OSE) rubber contract for July delivery was down 2.6 yen, or 0.74 percent, at 347.8 yen (USD2.27) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for May delivery fell 85 yuan, or 0.51 percent, to 16,450 yuan (USD2,383.23) per metric ton.
The most-active March butadiene rubber contract on the SHFE fell 250 yuan, or 1.93percent, to 12,715 yuan per ton. The yen has gained more than 2.6percent since Prime Minister Sanae Takaichi’s landslide victory on Sunday, putting the currency on track for its biggest weekly gain in more than a year.
A stronger Japanese currency makes yen-denominated assets less affordable to overseas buyers. Japan’s Nikkei share average surged past the 58,000 mark for the first time, continuing a scorching rally since Takaichi’s election victory.
China’s car sales fell last month at the fastest pace in nearly two years as competition steepens in the cut-throat market where automakers are grappling with fading government subsidies, softening demand and tighter regulations.
Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres. Lower automobile prices, driven by fierce competition, exert downward pressure on rubber tyre prices. Rubber trading volumes have largely declined in the lead-up to
the Lunar New Year next week, when factories in top consumer China typically shut down for a break or planned maintenance, according to LSEG-compiled data.
The front-month rubber contract on Singapore Exchange’s SICOM platform for March delivery last traded at 192.5 US cents per kg, down 0.2percent, as of 0700 GMT.
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