Japanese rubber futures gain on trade clarity, Thai weather woes

The Osaka Exchange (OSE) rubber contract for January delivery was up 0.3 yen, or 0.09%, at 317.4 yen ($2.15) per kg. The contract climbed 0.73% this week. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery rose 105 yuan, or 0.68%, to 15,550 yuan ($2,164.92) per metric ton.

The most active September butadiene rubber contract on the SHFE gained 10 yuan, or 0.09%, to 11,515 yuan ($1,603.16) per metric ton. Top rubber producer Thailand’s meteorological agency warned of severe conditions and rains from August 10-13. The US government said on Thursday that President Donald Trump would lower auto tariffs on Japan to 15% from 27.5%, in line with the agreement reached between the two countries.

This comes as much of the agreement made last month was never put into a signed document, sparking concerns that some Japanese companies could be subjected to higher tariffs than expected. Meanwhile, major Japanese automaker Toyota has cut its operating profit forecast for the business year by 16%.

However, it will keep making cars for US customers regardless of any impact from the tariffs, said Takanori Azuma, Toyota’s head of finance. He added that inventories are low so many customers are waiting in both the US and Japan.

Japanese automakers are among the hardest hit in the trade war as they resist raising prices, which has squeezed profit margins. 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 September delivery last traded at 168.1 US cents per kg, up 0.2%.

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