TOKYO (June 1): Benchmark Tokyo rubber futures dived to a near seven-month low on Thursday after Shanghai futures extended declines to their lowest in data available since August 2005 on a strong yuan against the dollar.
Shanghai futures have been hurt by a recent spate of a strong yuan, which surged to a near seven-month high with help from dollar-selling by major state-owned Chinese banks.
However, some traders said the market also came under pressure from talks about Chinese rubber stockpiles. Reuters sent a written inquiry to the government but there has been no reply as yet.
“There’s this rumour of the (Chinese) government replacing its reserves,” said a strategy researcher at a broker. “But no one can confirm the news so far.”
Another trader said: “Commodities were falling overall and rubber was leading the fall. The rumour on the government replacing rubber reserves put pressure on nearby futures contracts.”
A third source with a broker said the rumour was likely to be untrue given that it is hard to imagine that the Chinese government would engage in such speculative activities.
The Tokyo Commodity Exchange rubber contract for November delivery finished down 3.8 yen at 198.7 yen (US$1.79) per kg.
The most-active rubber contract on the Shanghai futures exchange for September delivery fell 490 yuan to finish at 12,480 yuan (US$1,835) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for July delivery last traded at 145.8 US cents per kg, up 0.3 US cents.
(US$1 = 111.0000 yen)
(US$1 = 6.8013 Chinese yuan)
