TOKYO (April 5): Benchmark Tokyo rubber futures slipped on Thursday, extending losses into a fourth straight day, as lingering worries over rising stock in Tokyo weighed on sentiment despite easing concerns over US-China trade spat.
The United States signalled its willingness on Wednesday to try to resolve an escalating trade dispute with China after Beijing retaliated against proposed US tariffs on US$50 billion in Chinese goods by targeting key American imports.
“Fears over US-China trade war receded a bit, but the TOCOM continued to decline as investors were concerned about higher stockpiles here,” said a Tokyo-based dealer, who declined to be named.
Rubber inventories at TOCOM-approved warehouses increased to 12,554 tonnes as of March 20, up 181 tonnes from March 10 and eight-fold from a year earlier, according to TOCOM data.
“Lots of supplies have arrived in Tokyo when the TOCOM prices were well above the physical prices in Thailand,” the dealer said.
The Tokyo Commodity Exchange (TOCOM) rubber contract for September delivery finished 3.3 yen lower at 176.3 yen (US$1.65) per kg, after touching the lowest since March 28 of 176.1 yen earlier in the session.
The TOCOM futures, which set the tone for rubber prices in Southeast Asia, may dive towards 150 yen in May since purchases by Japanese end-users in the new financial year to build up inventories will likely end this month, the dealer said.
The end-users trimmed their inventories last month ahead of March 31, end of the financial year, he said.
China’s financial markets are closed on Thursday and Friday for the Tomb Sweeping Day holiday or Qingming.
The front-month rubber contract on Singapore’s SICOM exchange for May delivery last traded at 134.0 US cents per kg, down 0.4 cent.
(US$1 = 107.0600 yen)
