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Thursday, May 26, 2022

TOCOM rubber futures rebound but plunging China stocks caps gains

TOKYO (Feb 25): Benchmark Tokyo rubber futures rebounded on Thursday, backed by an overnight rally in crude oil prices and firmer Japanese equities, but a plunge in Shanghai stock prices capped gains, dealers said.

The Tokyo Commodity Exchange rubber contract for August delivery <0#2JRU:> finished 1.8 yen, or 1.2%, higher at 156.0 yen (US$1.39) per kg, after snapping a 3-day winning streak the previous day.

The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, rose as high as 157.1 yen earlier, but profit taking wiped out some of the gains after the Shanghai stock market deepened losses, a Tokyo-based dealer said.

Crude oil prices, which rallied as much as 3% overnight, fell on Thursday as downward pressure from global overproduction and slowing economic growth outweighed strong gasoline demand and lower US crude output.

China stocks tumbled more than 6% on Thursday, posting their biggest one-day loss in a month, as investors booked profits after the market’s recent rebound.

“The basic bearish trend amid oversupply has not been changed, and most of the trades were position adjustments ahead of a G20 meeting in Shanghai,” the dealer said.

On the positive side, Japanese stocks rose on Thursday after the yen resumed its weakening trend against the US dollar, lifting exporters’ share prices and broader market sentiment.

The most-active rubber contract on the Shanghai futures exchange for May delivery fell 70 yuan to finish at 10,540 yuan (US$1,613.13) per tonne.

The front-month rubber contract on Singapore’s SICOM exchange for March delivery last traded at 110.5 US cents per kg, unchanged from the previous day.

(US$1 = 6.5339 Chinese yuan renminbi)
(US$1 = 112.0100 yen)

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