TOKYO (July 4): Benchmark Tokyo rubber futures plunged nearly 4% on Tuesday, falling from a near one-month high hit earlier in the session to below the key 200-yen level, after Shanghai futures took a dive.
“There was no fresh fundamental news, but Shanghai came under strong selling pressure as investors started unwinding their positions suddenly,” said Toshitaka Tazawa, an analyst at Fujitomi Co.
The Tokyo Commodity Exchange (TOCOM) rubber contract for December delivery finished 7.9 yen, or 3.9%, lower at 196.0 yen (US$1.73) per kg.
It earlier rose to a high of 206.8 yen, near last Friday’s peak which marked the highest since May 31, partially helped by a weaker yen against the US dollar.
But TOCOM gave up early gains as the most-active rubber contract on the Shanghai Futures Exchange for September delivery tumbled 740 yuan to finish at 12,715 yuan (US$1,869.9) per tonne.
“Tokyo and Shanghai markets have recovered from recent lows, but they may have a hard time moving higher from here as producer countries in Southeast Asia have entered a period of higher output since early June,” Tazawa said.
Rubber is tapped year round, but latex output drops during the dry wintering season, when trees shed leaves. Wintering in Thailand, the world’s biggest rubber producer, lasts from February to around May.
The front-month rubber contract on Singapore’s SICOM exchange for August delivery last traded at 146.0 US cents per kg, down 10.1 US cents.
(US$1 = 113.1600 yen)
(US$1 = 6.8000 Chinese yuan)
