TOKYO (Aug 22): Benchmark Tokyo rubber futures hit their lowest in 10 sessions in thin trade on Monday, surrendering gains made earlier in the day as falls in oil prices and Shanghai futures dampened market sentiment and prompted profit-taking.
The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery <0#2JRU:> finished 1.9 yen, or 1.2%, lower at 155.1 yen (US$1.54) per kg, after touching a low of 154.1 yen, the lowest since Aug. 12. Earlier in the day, it hit a high of 158.2 yen on a softer yen.
“A slide in the oil market and a plunging Shanghai rubber market added to the pressure,” said Satoru Yoshida, a commodity analyst at Rakuten Securities.
Oil prices fell as analysts doubted upcoming producer talks would rein in oversupply, saying that Brent would likely fall back below US$50 a barrel as August’s more than 20-percent crude rally looks overblown.
The most-active rubber contract on the Shanghai futures exchange for January delivery dipped 450 yuan to finish at 12,630 yuan (US$1,897.37) per tonne.
The dollar was up 0.5% at 100.75 yen, pulling away from an eight-week low of 99.550 touched early last week.
“The problem is that TOCOM has had no clear trend, with the prices remaining almost flat for the past few months. That has been discouraging investors to take bets on rubber,” Yoshida said.
The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, have been trapped in a narrow trading range between 145 and 165 yen since late May.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 128.9 US cents per kg, down 3.0 cents.
(US$1 = 100.7600 yen)
(US$1 = 6.6566 Chinese yuan)