13.4 C
New York
Friday, May 20, 2022

TOCOM rubber hits 25-month low on worries about slowing China economy

TOKYO (Oct 29): Benchmark Tokyo rubber futures plunged to a 25-month low on Monday, as worries about a slowing economy in top buyer China prompted a flurry of selling in Shanghai futures while the yen’s strength against the US dollar added to pressure.

TOCOM rubber hits 25-month low on worries about slowing China economyChinese data over the weekend underscored worries of a cooling economy as profit growth at its industrial firms slowed for the fifth consecutive month in September as sales of raw materials and manufactured goods ebbed.

“It seems that mounted fears over negative impact on China’s economy from an escalating US-China trade spats are becoming reality,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.

The Tokyo Commodity Exchange (TOCOM) rubber contract for April delivery finished 4.3 yen, or 2.6%, lower at 162.0 yen (US$1.45) per kg.

The TOCOM benchmark, which sets the tone for rubber prices in Southeast Asia, fell to 161.5 yen, the lowest since Sept 20, 2016, earlier in the session.

TOCOM rubber hits 25-month low on worries about slowing China economy

The most-active rubber contract on the Shanghai futures exchange for January delivery tumbled 480 yuan to finish at 11,340 yuan (US$1,631) per tonne, after touching an intraday low of 11,280 yuan, the lowest since Aug 3.

Against the yen, which acts as a safe-haven in times of political and economic turmoil, the dollar slid to around 111.90 in Monday afternoon trade in Asia, compared with around 112.14 on Friday.

A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.

“TOCOM benchmark fell through a 165 yen mark, which has been a support level since July, leaving negative impression to the market and signalling further selloff,” Yoshida said.

“Unless there is some strong data coming out from China, investors’ weak sentiment is likely to continue.”

TOCOM’s new technically specified rubber (TSR) 20 futures contract for April delivery fell 3.2% to close at 145.2 yen per kg.

The front-month rubber contract on Singapore’s SICOM exchange for November delivery last traded at 126.8 US cents per kg, down 3.7 cents.

(US$1 = 111.9600 yen)
(US$1 = 6.9529 Chinese yuan)

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

11,298FansLike
12,893FollowersFollow
751FollowersFollow
- Advertisement -

Latest Articles

Popular Articles