TOKYO (Nov 16): Benchmark Tokyo rubber futures shed earlier gains to end lower on Thursday, closing at their lowest in nearly five months, as extended losses in Shanghai futures prompted fresh selling amid worries about oversupply and slowing economy in top buyer China.
“Investors have been unwinding long positions as their expectations for higher prices of industrial materials in China have faded,” said a Tokyo-based dealer, who declined to be named.
London nickel and copper futures edged back towards multi-week lows on Thursday, reflecting investor worries over a recent spate of data that showed China’s economy cooled in October.
The Tokyo Commodity Exchange (TOCOM) rubber contract for April delivery finished down 1.9 yen, or 1%, at 191.1 yen (US$1.69) per kg, the lowest intraday level since Oct 31, and lowest close since June 26.
The most-active rubber contract on the Shanghai futures exchange for January delivery fell 280 yuan to finish at 13,270 yuan (US$2,000) per tonne, following the previous day’s tumble by 890 yuan.
“The TOCOM benchmark may be supported at about 190 yen mark in a short term, but an overall oversupply condition with heavy inventories is expected to weigh on the market sentiment in a long term,” the dealer said.
The front-month rubber contract on Singapore’s SICOM exchange for December delivery last traded at 137.5 US cents per kg, down 2.3 cents.
(US$1 = 113.1600 yen)
(US$1 = 6.6336 Chinese yuan)
