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Tuesday, July 5, 2022

Tokyo rubber futures drop, tracking sharp fall in Shanghai market (Sept 19)

TOKYO (Sept 19): Benchmark Tokyo rubber futures fell 1.6 percent on Friday, marking a fourth straight week of decline, as Shanghai market tumbled amid worries about slowing demand in China, the world’s biggest rubber consumer.

The benchmark rubber contract on the Tokyo Commodity Exchange (TOCOM) for February delivery fell 3.0 yen to settle at 189.2 yen ($1.7351) per kg, the lowest closing level since Sept. 11.

“Tokyo market started with a positive tone on a weaker yen and a rally in Japanese equities, but it came under pressure after Shanghai started falling without any fresh news,” said Toshitaka Tazawa, an analyst at Fujitomi Co.

The most-active rubber contract on the Shanghai futures exchange for January delivery fell 560 yuan to finish at 12,835 yuan ($2,090) per tonne, its lowest ever.

“Investors are worried about oversupply in Asia and weakening demand in China. It looks that the TOCOM benchmark will struggle to recover 200 yen level next week,” he said.

News on Thai government’s offers of soft loans for rubber purchases gave little support to the market.

Thailand’s government has approved 30 billion baht ($931 million) in soft loans to help cooperatives and local firms buy rubber from farmers in a bid to prop up prices of the commodity, which are at multi-year lows because of weak global demand.

The front-month rubber contract on Singapore’s SICOM exchange for October delivery last traded at 150.40 U.S. cents per kg, down 2.5 cents.

– Reuters

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