TOKYO (June 18): Benchmark Tokyo rubber futures fell on Monday to their lowest in nearly three months as renewed trade tensions between the United States and China raised concerns about slower global economic growth.
US President Donald Trump said he was pushing ahead with hefty tariffs on US$50 billion of Chinese imports on Friday, and the smoldering trade war between the world’s two largest economies showed signs of igniting as Beijing immediately vowed to respond in kind.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, came under pressure along with other commodities due to the escalating US-China trade spat, said Toshitaka Tazawa, an analyst with commodities broker Fujitomi Co.
“The latest US move also boosted expectation that Trump will impose new import duties on Japanese cars, which may reduce tyre demand,” he said.
Washington last month launched a national security investigation into car and truck imports which could lead to new tariffs on one of Japan’s major export products to the United States.
The TOCOM rubber contract for November delivery finished 3.2 yen lower, or 1.8%, at 176.8 yen (US$1.60) per kg, after touching the lowest since March 26 of 175.6 yen earlier in the session.
Chinese financial markets were closed on Monday for a public holiday.
“If Shanghai futures tumble, the TOCOM could dive below its March low and hit the lowest since October 2016,” Tazawa said.
The front-month rubber contract on Singapore’s SICOM exchange for July delivery last traded at 136.6 US cents per kg, down 2.0 cents.
(US$1 = 110.5500 yen)
