TOKYO (Aug 19): Benchmark Tokyo rubber futures slipped for a fourth straight session on Wednesday and hit a fresh 10-month low, as concerns over the struggling Chinese economy continued to weigh on the market.
The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery <0#2JRU:> finished 3.3 yen, or 1.8 percent, lower at 183.6 yen ($1.48) per kg, after hitting a low of 182 yen, the lowest since Oct. 17, 2014, earlier in the session.
“Persistent worries about wilting demand in China were weighing on the rubber prices,” said Toshitaka Tazawa, an analyst at Fujitomi Co.
“Given the sustained downtrend with no bullish news, investors were hesitant to take fresh long positions.”
Extended losses in Shanghai shares in early trades added to the pressure, dealers said, although the share market stabilised later.
Chinese stocks reversed sharp declines and ended higher after the central bank injected more funds into the financial system for a second day in a bid to calm panicky markets.
But the most-active rubber contract on the Shanghai Futures Exchange for January delivery fell 30 yuan to finish at 12,075 yuan ($1,888.19) per tonne.
“The TOCOM benchmark is likely to head lower, potentially toward the last October’s low of 173.8 yen,” Tazawa said.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 129.0 U.S. cents per kg, unchanged from the previous day.
($1 = 124.2300 yen)
($1 = 6.3950 Chinese yuan)
