Japanese rubber futures rise on automobile demand optimism
SINGAPORE: Japanese rubber futures rose on Tuesday, buoyed by optimism over rising automobile demand, following plans by China’s BYD to ramp up electric vehicle (EV) assembly in Brazil. The Osaka Exchange (OSE) rubber contract for December delivery ended daytime trade up 2.9 yen, or 0.94%, at 312.2 yen ($2.14) per kg.
The rubber contract on the Shanghai Futures Exchange (SHFE) for September delivery rose 50 yuan, or 0.36%, to 13,985 yuan ($1,949.92) per metric ton.
The most active August butadiene rubber contract on the SHFE gained 275 yuan, or 2.49%, to 11,305 yuan ($1,576.25) per ton. China’s BYD has announced plans to start assembling EVs in Brazil, its largest foreign market, to avoid import tariffs and is negotiating a lower tax rate on those vehicles.
The new factory aims to assemble 50,000 cars this year. Automobile sales could influence the intensity of automobile manufacturing, which involves using rubber-made tyres.
The yen slid to 145.88 yen per dollar as US President Donald Trump imposed 25% tariffs on Japan. Japan’s Nikkei opened lower, but then turned positive after Trump said that tariffs may be adjusted for some countries.
Meanwhile, top rubber producer Thailand’s meteorological agency warned of heavy rains and accumulations from July 10-12. The front-month rubber contract on Singapore Exchange’s SICOM platform for August delivery last traded at 162.5 US cents per kg, up 0.3%.
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