“Tokyo Rubber futures took a tumble following an upswing in early trade amidst lingering trade tension between China and the US.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, followed losses in Shanghai while demand was curbed ahead of a regional conference to be held in Qingdao, a major tyre production hub in China.
The news of renewed Sino-US trade tensions is still weighing on prices,” said Tang Xiaonan, an analyst with JLC Network Technology Co Ltd.
“But the impact is dwindling as the trade war potential comes and goes. On the demand side, some factories in Qingdao have already started reducing operations ahead of the Shanghai Cooperation Organisation (SCO) summit,” Tang said.
China said it would defend its own interests if Washington looked to ignite a trade war, after the White House said on Tuesday that it still held the threat of imposing tariffs on US$50 billion of imports from China.
The Tokyo Commodity Exchange rubber contract for November delivery finished 1.1 yen (US$0.0101) lower at 190.9 yen per kg.
TOCOM inched up in early trade, boosted by firm oil prices overnight.
The most-active rubber contract on the Shanghai Futures Exchange for September delivery fell 130 yuan (US$20.31) to finish at 11,670 yuan per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for June delivery last traded at 140.1 US cents per kg, down 2.8 cents.
The SCO summit, which runs from June 9-10, will attempt to create new agreements on security issues such as counter-terrorism and drug smuggling among the seven-member bloc.