TOKYO, Oct 19 (Reuters) – Benchmark Tokyo rubber futures plunged more than 3 percent to a one-week closing low on Wednesday, tracking weaker Shanghai futures and as investors took profits, while some traders stayed on the sidelines ahead of the third U.S.presidential debate.
“The market had a correction since the rally was overdone in the past few weeks,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities. Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, have risen more than 15 percent since mid-September as of Monday when the benchmark contract hit the highest since May 9 at 184.6 yen. The TOCOM rubber contract for March delivery JRUc6 0#2JRU: ended 6.3 yen, or 3.4 percent, lower at 176.7 yen ($1.71) per kg on Wednesday, the lowest close since Oct.11.
The most-active rubber contract on the Shanghai futures exchange for January delivery SNRcv1 tumbled 490 yuan to close at 13,760 yuan ($2,042.76) per tonne, retreating from a nearly six-month high hit earlier this week. “There was little reaction to China’s GDP as it came in line with market forecasts,” Kikukawa said.
China’s economy expanded at a steady 6.7 percent in the third quarter and looks set to hit Beijing’s full-year target, fuelled by stronger government spending, record bank lending and a red-hot property market that are adding to its growing pile of debt. TOCOM will head lower as concerns about slower output in Thailand after King Bhumibol Adulyadej’s death eased, Kikukawa said.
The world’s longest-reigning monarch, King Bhumibol died on Thursday in a Bangkok hospital at the age of 88, clouding the economic outlook of the world’s biggest rubber producer.
The front-month rubber contract on Singapore’s SICOM exchange for November delivery STFc1 last traded at 146.0 U.S. cents per kg, down 5.0 cents. The third and final of three U.S.presidential debates will be held on Wednesday evening in Las Vegas.
($1 = 6.7360 Chinese yuan) ($1 = 103.4300 yen)
(Reporting by Yuka Obayashi; Editing by Subhranshu Sahu)
