TOKYO, Dec 8 (Reuters) – Benchmark Tokyo rubber futures retreated on Tuesday from a two-month high as investors took profits following an overnight plunge in oil prices, while weaker Shanghai futures added to the pressure. The Tokyo Commodity Exchange rubber contract for May delivery JRUc6 0#2JRU: finished 2.8 yen, or 1.6 percent, lower at 170.8 yen ($1.39) per kg after hitting 174.8 yen, the highest since Oct.15, in the previous evening session.
Crude oil futures tumbled six percent on Monday to their lowest in nearly seven years after OPEC failed to address a growing supply glut.Although prices recovered slightly on Tuesday the market remained weak due to global oversupply.
“Slumping oil prices cooled investors’ sentiment, prompting profit taking,” a Tokyo-based trader said. Also on the downside, China’s trade performance remained weak in November, casting doubt on hopes that the world’s second-largest economy would level off in the fourth quarter.
The most-active rubber contract on the Shanghai futures exchange for May delivery SNRcv1 fell 125 yuan to finish at 10,200 yuan per tonne. But vehicle sales in the country rose 17.6 percent in November from a year earlier, the China Passenger Car Association said on Tuesday.
“With nagging worries about slowing demand in China, the TOCOM rubber prices will likely face a ceiling at near 180 yen,” the dealer said. The front-month rubber contract on Singapore’s SICOM exchange for January delivery STFc1 last traded at 117.0 U.S. cents per kg, down 1.3 cents.
($1 = 123.0600 yen)
(Reporting by Yuka Obayashi; editing by David Clarke)
