TOKYO (Aug 25): Benchmark Tokyo rubber futures ended down 3.5% on Tuesday, recovering from a six-year low hit earlier in the session as oil prices recovered and the dollar strengthened against the yen after heavy losses.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, have fallen 8.5% in the past three sessions amid a slump in oil and other commodities amid growing nervousness about economic activity and demand prospects in the top industrial metals consumer, China.
China stocks slumped about 4% on Tuesday, touching eight-month lows, as investors dumped shares after a grim “Black Monday” that battered global markets but failed to prompt fresh rescue measures from Beijing.
The dollar rose against the yen, pulling up from a slide to seven-month lows the previous day, but the outlook remained clouded by worries of a China-led slowdown in global growth.
The Tokyo Commodity Exchange rubber contract for January delivery <0#2JRU:> finished 6.2 yen lower at 168.9 yen per kg, after falling as much as 5.7% to 165.1 yen, the lowest since July 17, 2009, earlier in the session.
The front-month August contract expired on Tuesday at 160.2 yen, down 5.3 yen on the day.
“TOCOM was swayed the most by the dollar-yen, which made some recovery today,” said a source with a Tokyo-based broker. “But we may be in for a downward market as rubber inventories data shows there’s tepid demand in China and Japan, among others.”
The most-active rubber contract on the Shanghai Futures Exchange for January delivery fell 295 yuan to finish at 11,295 yuan per tonne, after touching 11,150 yuan, the lowest for the most-traded rubber contract since at least August 2005.
Japan’s Ube Industries Ltd said its 40-percent owned joint venture on Monday hosted an opening ceremony of synthetic rubber plant in Malaysia with a capacity of 50,000 tonnes per year.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 124.00 US cents per kg, down 1.7 cent.