Japanese rubber futures lower as China auto market price war weighs
SINGAPORE: Japanese rubber futures edged down on Thursday, as a prolonged price war in top consumer China’s vehicle market weighed on sentiment for the tyre-making material, though wet weather in production areas cushioned the fall.
The Osaka Exchange (OSE) rubber contract for November delivery ended daytime trade 2.3 yen lower, or 0.73%, at 314.6 yen ($2.16) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery fell 190 yuan, or 1.35%, to 13,880 yuan ($1,929.98) per metric ton.
The most active June butadiene rubber contract on the SHFE ticked up 15 yuan, or 0.13%, to 11,345 yuan ($1,577.49) per ton. In China, an intensifying auto industry price war has stoked fears of a long-anticipated shake-out in the world’s largest car market, following Chinese electric-vehicle giant BYD’s fresh discounts across more than a dozen models.
Great Wall Motors Chairman Wei Jianjun warned last week China’s auto sector was in an unhealthy state, with pricing pressure hammering the bottom lines of car companies and suppliers. Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres.
While seasonal harvesting has begun in production areas, frequent rainfall disturbances have delayed tapping, affecting the supply of raw materials, said Chinese financial information site Tonghuashun Information.
Top rubber producer Thailand’s meteorological agency warned of heavy rain and accumulations that could cause flash floods from May 28-29, adding that farmers should be wary of crop damage.
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