Benchmark Tokyo rubber futures hit a 25-month low on Tuesday as optimism that the automobile sector in China may benefit from tax changes was offset by lingering concerns about the global economy amid Sino-US trade tensions.
Shares in Chinese auto firms leapt on Tuesday on hopes the sector may benefit from tax changes after a report that China's top regulator is proposing a 50% cut to car purchase taxes.
US President Donald Trump said he thinks there will be "a great deal" with China on trade, but warned that he has billions of dollars worth of new tariffs ready to go if a deal isn't possible.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, have been hurt by the outlook for "a no clear exit from the US and China trade tensions," said a Japanese trading source.
The Tokyo Commodity Exchange rubber contract for April delivery finished 0.2 yen higher at 162.2 yen (US$1.44) per kg after touching 160.6 yen, the lowest since Sept. 16, 2016.
TOCOM's technically specified rubber (TSR) 20 futures contract for April delivery rose 0.3 yen to close at 145.5 yen per kg.
The most-active rubber contract on the Shanghai futures exchange for January delivery fell 1.5% to finish at 11,350 yuan (US$1,629) per tonne.
Vietnam, the world's third-biggest natural rubber producer, exported 1.21 million tonnes in Jan-October this year, up about 13% from a year ago, data showed.
The front-month rubber contract on Singapore's SICOM exchange for November delivery last traded at 124.8 US cents per kg, down 1.9 cent.
(US$1 = 112.7100 yen)
(US$1 = 6.9656 Chinese yuan)
