TOKYO, Nov 4 (Reuters) – Benchmark Tokyo rubber futures fell more than 2 percent on Wednesday, hitting a fresh six-year low and extending losses to a third straight session, amid nagging worries over softening demand growth in top buyer China, dealers said. Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, has been on a downtrend since hitting this year’s high of 247.9 yen in early June, weighed down by fears of oversupply in Asia and weakening demand in China. The TOCOM rubber contract for April delivery JRUc6 0#2JRU: finished 4.0 yen, or 2.5 percent, lower at 155.7 yen ($1.29) per kg. It earlier hit a low of 154.7 yen, falling below the last week’s low and marking the lowest since July 2009.The TOCOM was closed on Tuesday due to a Japanese national holiday.
“Weak economic data in China released earlier this week has battered the market sentiment,” said Satoru Yoshida, commodity analyst at Rakuten Securities. China’s factory activity fell for an eighth straight month in October but at a slower pace as export orders revived, a private survey showed on Monday, pointing to further sluggishness in the world’s second-largest economy.
The Caixin figures followed Sunday’s official survey, which showed activity in China’s manufacturing sector unexpectedly contracted in October for a third straight month.
Investors shrugged off Thai measures to support sagging local prices. Thailand’s cabinet on Tuesday approved measures worth 13 billion baht ($365 million) to help rubber farmers and support falling prices, the director of a state rubber agency said.
“The market is now focusing more on demand-side, rather than supply-side,” Yoshida said. “Given the languish tone of the market, the benchmark may test 155 yen again.
If it does not get enough support there, it may head down toward 150 yen,” he said. The most-active rubber contract on the Shanghai futures exchange for January delivery SNRcv1 fell 70 yuan to finish at 10,705 yuan ($1,689.95) per tonne. The front-month rubber contract on Singapore’s SICOM exchange for December delivery STFc1 last traded at 116.8 U.S. cents per kg, down 1.3 cent.
($1 = 121.0800 yen) ($1 = 6.3345 Chinese yuan)
(Reporting by Yuka Obayashi; Editing by Anand Basu)