TOKYO (Nov 30): Benchmark Tokyo rubber futures tumbled nearly 5% on Wednesday as a plunge in Shanghai futures sparked profit-taking following the recent rally, but posted their biggest monthly jump in 10 years.
“The TOCOM got hit by a sharp drop in Shanghai futures,” said Jiong Gu, an analyst with Yutaka Shoji Co.
The Tokyo Commodity Exchange rubber contract for May delivery ended down 11.8 yen, or 4.9%, at 228.1 yen (US$2.02) per kg. However, it jumped 24.3% this month, the largest monthly leap since December 2006.
The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, have soared 50% since the end of August as of Wednesday’s close, having hit 1½-year highs recently, helped by stronger Shanghai futures and signs of improved economy in top buyer China.
The most-active rubber contract on the Shanghai futures exchange for May delivery plunged 1,340 yuan to finish at 17,775 yuan (US$2,583.09) per tonne.
“The Tokyo market may head down to a near-term support at 212 yen as investors seek to adjust positions after the recent rally,” Gu said.
“Then the market may rebound again if investors start focusing on falling inventories in Japan.”
The front-month rubber contract on Singapore’s SICOM exchange for December delivery last traded at 168.1 US cents per kg, down 4.8 cents.
(US$1 = 112.7100 yen)
(US$1 = 6.8813 Chinese yuan)
