TOKYO (March 8): Benchmark Tokyo rubber futures ended down 1.1% on Tuesday, snapping five sessions of gains, as the market came under pressure from weak Chinese trade data and a stronger yen.
China’s February trade performance was much worse than economists had expected, with exports tumbling the most in over six years and imports also sliding, days after top leaders reassured investors that the outlook for the world’s second-largest economy remains solid.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, had risen 15.7% over five days to Monday, as risk appetite grew after oil prices continued to recover and as fears over slowing growth in the Chinese economy eased.
“Today’s decline is a reminder that strong gains in the past several days may have been unsubstantiated,” said a Tokyo-based dealer. “Slowing Chinese export and imports and a strong yen sent Shanghai futures falling, which also dragged on TOCOM.”
The Tokyo Commodity Exchange rubber contract for August delivery <0#2JRU:> finished 2 yen lower at 177.5 yen per kg, a day after touching a 6½-month high.
The US dollar was quoted around 112.99 yen, compared with around 113.61 yen on Monday afternoon, as the perennial safe-haven yen logged solid gains as risk appetite waned.
There were signs of a recovery in China’s rubber imports, however. China’s natural and synthetic rubber imports in February rose 14.8% from a year earlier to 310,000 tonnes, trade data showed on Tuesday. Imports in the first two months of the year rose 23.5% to 770,000 tonnes.
The most-active rubber contract on the Shanghai futures exchange for May delivery fell 55 yuan to finish at 11,610 yuan (US$1,785) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for April delivery last traded at 132.40 US cents per kg, down 2.2 US cents.
(US$1 = 6.5058 Chinese yuan)
