Tokyo Commodity Exchange (TOCOM) futures slid for a third straight session, hitting the lowest in nearly four years, as rising lockdowns due to the coronavirus raised worries about a global slowdown and demand in the material. TOCOM’s rubber contract for August delivery finished 5.1 yen lower at 148.9 yen ($1.4) per kg, after hitting the lowest since July 11, 2016 of 147.3 yen earlier in the session.
The TOCOM was closed on Friday for a Japanese national holiday. The most-active rubber contract on the Shanghai futures exchange for September delivery fell 445 yuan to finish at 9,630 yuan ($1,354) per tonne. The front-month rubber contract on Singapore’s SICOM exchange for April delivery last traded at 109.8 US cents per kg, down 6.7%.
“The sell-off came as disruption in car plants across the world is widening, eroding rubber demand,” a Tokyo-based dealer said. “There is a good chance that the market will rebound sharply if the virus crisis looks to end as physical rubber pries are holding firmer due to a slower output season in Southeast Asia, but we just don’t know when the crisis will end,” he said.
Nearly one in three Americans was under orders on Sunday to stay home to slow the spread of the pandemic as Ohio, Louisiana and Delaware became the latest states to enact broad restrictions. Cooper Tire said it will temporarily shut down its tire manufacturing facilities in the Americas.
Volkswagen CEO Herbert Diess on Saturday warned that the coronavirus crisis may force the company to keep its factories shut for longer than initially planned. India’s biggest automaker Maruti Suzuki India and peers including Mahindra & Mahindra, Mercedes-Benz, Fiat Chrysler Automobiles as well as Hyundai Motor
said they will halt car production in the country due to the outbreak. Japan’s benchmark Nikkei stock average rebounded on Monday, on optimism the Tokyo Olympics will not be cancelled. The US dollar was quoted around 110.56 yen on Monday, compared with 108.83 yen in late Asia trade on Thursday.
Brent crude prices extended falls on Monday with demand sliding as travel and industrial activity contracted across the globe in a bid to stem the spread of coronavirus.
Published under arrangements with Reuters.
No content from Business Recorder shall be reproduced, published, broadcast, rewritten for broadcast or publication, or redistributed directly or indirectly in any medium.
Business Recorder shall not be responsible or held liable for any error of fact, opinion or recommendation and also for any loss, financial or otherwise, resulting from business or trade or speculation conducted, or investments made, on the basis of the information posted here. Nor shall Business Recorder be held liable for any actions taken in consequence.’)” onMouseOut=”popop(event,’tip1′)” style=”cursor:pointer”>Copyright Reuters, 2020