TOKYO (April 10): Benchmark Tokyo rubber futures trimmed gains on Monday as Shanghai futures extended their sharp declines amid concerns over ample supplies.
Shanghai futures ended down 3.4%, on top of the 4.7% decline on Friday, after China’s Sinopec ordered its rubber unit in Yanshan refinery to shut in response to environmental checks, after the Ministry of Environmental Protection detected odour.
The company said it would upgrade two sets of emission equipment at the unit by the end of 2017. It did not give a timetable for the shutdown.
“The news hit the thin trading volumes directly, raising concerns about excess rubber supplies,” said a Tokyo-based dealer source. “The Shanghai market remained under heavy undertones overall.”
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, rose as much as 1.2% before trimming gains.
The Tokyo Commodity Exchange rubber contract for September delivery finished 1.5 yen higher at 239.4 yen (US$2.15) per kg.
The most-active rubber contract on the Shanghai Futures Exchange for September delivery closed 545 yuan lower at 15,520 yuan (US$2,247) per tonne after hitting its lowest since Nov 7 at 15,405 yuan earlier in the day.
The front-month rubber contract on Singapore’s SICOM exchange for May delivery last traded at 171.1 US cents per kg, down 2.7 US cents.
(US$1 = 111.3200 yen)
(US$1 = 6.9081 Chinese yuan)
