Japanese rubber futures dip on China auto price war
SINGAPORE: Japanese rubber futures ended lower in daytime trade on Monday, weighed down by heavy price competition in top producer China’s automobile sector, though concerns over raw material shortages capped losses.
The Osaka Exchange (OSE) rubber contract for February delivery was down 0.3 yen, or 0.1 percent, at 314.8 yen (USD2.14) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery gained 30 yuan, or 0.19percent, to 15,860 yuan (USD 2,217.28) per metric ton.
The most active October butadiene rubber contract on the SHFE climbed 40 yuan, or 0.34percent, to 11,895 yuan per metric ton.
Shares in BYD slipped on Monday after the EV manufacturer posted its first quarterly profit decline in over three years on intense price competition in China’s auto industry. Lower automobile prices, driven by fierce competition, exert downward pressure on rubber tyre prices.
Still, “concerns over raw material shortages and higher cup-lump prices following the recent rainy season supported sentiment, alongside a strong rally in Chinese equities and prospects of US Fed rate cuts,” Japan Exchange Group said in a report on Monday.
The dollar fell 0.04 percent against the yen to 146.98, extending its monthly decline of 2.5 percent against the Japanese currency in August.
A weaker currency makes yen-denominated assets more affordable to overseas buyers. Meanwhile, top rubber producer Thailand’s meteorological agency warned of heavy rains and accumulations that may cause flash floods and overflows from September 1-6.
Read More: Here