SINGAPORE: Japanese rubber futures declined on Friday and posted weekly losses amid a strengthening yen and tit-for-tat tariffs between the US and top consumer China, outweighing off-season supply concerns. The Osaka Exchange’s (OSE) August rubber contract closed down 3.7 yen, or 1.05%, at 349.7 yen($2.37) per kg.
The contract lost 2.97% this week. Meanwhile, the May rubber contract on the Shanghai Futures Exchange (SHFE) eased 20 yuan, or 0.11%, to 17,380 yuan ($2,398.33) per metric ton.
The most-active April butadiene rubber contract on the SHFE ticked down 10 yuan, or 0.07%, to 13,610 yuan ($1,878.10) per metric ton. The US tariff increase has put pressure on commodity markets, leading to a bearish sentiment for rubber markets, said broker New Century Futures.
US President Donald Trump’s doubling of duties on Chinese goods to 20% came into effect on Tuesday, prompting retaliation from Beijing.
China’s imports unexpectedly shrank over the January-February period, while exports lost momentum, amid escalating US tariff pressures. In afternoon trading, the dollar fell 0.6% to 147.96 yen, hitting a five-month low earlier of 147.31, as tariff concerns intensified safe-haven bids for the Japanese currency.
A stronger currency makes yen-denominated assets less affordable to overseas buyers. Still, natural rubber is in a low production period, causing market supply to decrease, Chinese rubber sales portal Natural Rubber Network said in a note.
Rubber crops usually undergo a season of low production from February to May, before a peak harvesting period that lasts until September.
The front-month rubber contract on Singapore Exchange’s SICOM platform for March delivery last traded at 200.4 US cents per kg, down 1.4%.
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