TOKYO (July 10): Benchmark Tokyo rubber futures erased early gains by the close on Tuesday as anxieties about the Sino-US trade war cast a long shadow over investor sentiment.
On Friday, both China and the United States slapped tit-for-tat tariffs on US$34 billion worth of each other’s goods, stirring fears of a prolonged dispute. The row has rattled Chinese financial markets, with the yuan suffering its worst monthly loss on record in June.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, also came under pressure from weaker Shanghai futures.
“The US-China tension is overall not good for commodities overall,” said a Japanese trading source.
The Tokyo Commodity Exchange rubber contract for December delivery finished 1.4 yen lower at 173.2 yen (US$1.56) per kg, after touching a 21-month low of 166.9 yen last Thursday.
The most-active rubber contract on the Shanghai futures exchange for September delivery fell 80 yuan to finish at 10,335 yuan (US$1,562) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for August delivery last traded at 130.7 US cents per kg, down 1.1 cent.
(US$1 = 111.0200 yen)
(US$1 = 6.6146 Chinese yuan)