SINGAPORE: Japanese rubber futures slipped on Friday to end the month in the red, as mounting trade tensions between the US and top consumer China outweighed off-season supply concerns.
The Osaka Exchange (OSE) August rubber contract ended daytime trade 0.4 yen higher, or 0.11%, at 360.4 yen ($2.40) per kg. The contract has lost 8.62% this month. The May rubber contract on the Shanghai Futures Exchange (SHFE) rose 140 yuan, or 0.8%, to 17,710 yuan ($2,430.32) per metric ton.
The most active April butadiene rubber contract on the SHFE added 260 yuan, or 1.88%, to 14,100 yuan ($1,934.93) per metric ton. US President Donald Trump on Thursday said his proposed 25% tariffs on Mexican and Canadian imports will take effect on March 4 along with an extra 10% duty on Chinese goods. With trade talks not materialising yet, there are signs Trump is preparing for a wider economic decoupling from China, dashing hopes that a deal might be reached in the near-term.
Trump had imposed a 10% tariff on Chinese imports earlier this month. The cumulative tariff now stands at 20%. Meanwhile, China’s most recent major push to boost household consumption - its trade-in scheme - comes with trade-offs, which reduce expenses on unsubsidised goods and services and cut into future spending. The shortcomings are pressuring authorities to unveil consumer-focused policies with a longer-term impact when China’s rubber-stamp parliament begins its annual meeting on March 5.
The yen was set to end the month more than 3.5% higher, its best since last July. A stronger currency makes yen-denominated assets less affordable to overseas buyers. Meanwhile, Vietnam and Thailand have entered a period of low harvesting and the overall supply of rubber has shrunk, Chinese consultancy Guohai Liangshi Futures said. Rubber crops usually undergo a season of low production from February to May.
Comments