NR prices fall down as fear of Car Tariff

The weakening of rubber prices continued at the end of trading the second day in a row on Tuesday (3/7/2018).

The price of rubber for delivery in December 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed down 0.86% or 1.50 points at 172.30 yen per kilogram (kg).

The weakening of the main raw material prices of these tires began as it opened down 0.35% or 0.60 points at 173.20 position, having ended down 1.42% or 2.50 points at 173.80 level on Monday trading (2 / 7).

According to Hideshi Matsunaga, an analyst at brokerage firm Sunward Trading, the rubber market is under pressure that a slowdown in China's economy could weaken demand for rubber.

As is known, the China Bureau of Statistics (NBS) noted China's Purchasing Managers' Index (PMI) fell to 51.5 in June, below analyst expectations of 51.6, down from 51.9 in May.

The results are in line with recent data (credit growth, investment and retail sales) showing China's economic slowdown, as policymakers manage debt risk and heated up trade ties with the United States.

China's export demand index also contracted for the first time since February 2018, down 0.03% to 49.8 from the previous month.

"Concerns that the US and China could impose tariffs on cars amid trade disputes also weighed on the exchange," Matsunaga added, as quoted by Bloomberg.

The policy of reciprocal import tariffs between the United States and China will enter a new phase this week.

The reason, starting this Friday (6/7/2018), two countries with the largest economic power in the world will begin to impose mutual tariffs for hundreds of different types of imported products, as well as marking a major escalation of conflict.

Tariff disputes between President Donald Trump and China threatened the cancellation of years of lobbying by automakers and unnerved a number of European luxury brands because of the decisions made.

"Most clients wait. After the issue of trade war, many imported vehicles such as Mercedes-Benz or BMW, especially BMW X4, X5, and X6 made in the US are affected. We are informing clients to buy cars at the promised price before July 6th, but there is no guarantee thereafter, "said Liu Yuanyuan, a sales manager.

In contrast to rubber, West Texas Intermediate (WTI) oil prices for August delivery rose 0.99%, or 0.73 points, to settle at $ 74.67 a barrel on the New York Mercantile Exchange at 13:46 pm.

Meanwhile, the yen was down 0.12% or 0.13 points to 111.02 per US dollar at 13:56 pm, having ended down 0.13% or 0.14 points at 110.89 during trading on Monday (2/7).