TOKYO (March 11): Benchmark Tokyo rubber futures extended declines for a fourth session on Friday, as lacklustre economic indicators in North Asia raised worries over rubber consumption, despite ongoing production curbs by Asia’s top producers to support prices.
The Tokyo Commodity Exchange rubber contract for August delivery finished 2.5 yen lower at 168.9 yen (US$1.49) per kg, marking a 8.5% slide from a 6-1/2-month high hit on Monday. For the week, it fell 3.3%.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, rose 15.7% over five sessions till Monday, aided by export cuts from top Asian producers, and as oil prices continued to recover, while fears over slowing growth in the Chinese economy eased.
But the market has fallen since Tuesday, when China’s sluggish trade data re-ignite worries over the world’s top consumer’s economy.
“Economic outlook looks grim as exemplified by worsening in business sentiment in Japan and weak data in China,” said a source with a Tokyo-based broker.
“But there is hope for price recovery as production curbs in Thailand have led to price increases there.”
Japanese business sentiment worsened sharply in the first quarter, a government survey showed on Friday, suggesting that financial market turbulence and sluggish global demand were taking a toll on a fragile economic recovery.
Oil prices jumped on Friday supported by fresh investment and a strong yuan, which makes fuel cheaper for Chinese importers, but analysts warned that any price rally was pre-mature as a global glut remained in place.
The U.S. dollar was quoted around 113.61 yen on Friday, as compared with 113.63 yen in the previous session.
The most-active rubber contract on the Shanghai futures exchange for May delivery fell 30 yuan to finish at 11,345 yuan (US$1,747) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for April delivery last traded at 122 U.S. cents per kg, down 2.5 cents.
(US$1 = 6.4946 Chinese yuan renminbi)
(US$1 = 113.7000 yen)
