TOKYO (April 6): Benchmark Tokyo rubber futures snapped a four-day losing streak on Friday on bargain-hunting, but posted a fall for the week amid concerns over rising stockpiles despite the start of a seasonal decline in production due to wintering.
However, the gains were limited as US President Donald Trump’s threat of new tariffs on China reignited fears of a trade war between the world’s two biggest economies.
Rubber is tapped year round, but latex output drops during the dry wintering season, when trees shed leaves.
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Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, have barely recovered from a 17-month hit on March 26 as Japanese stocks stood over 15,000 tonnes, compared with below 5,000 tonnes a year earlier.
The agreement by the International Tripartite Rubber Council (ITRC) – which consists of Thailand, Indonesia, and Malaysia – to cut natural rubber exports to stabilize global prices expired at March-end, but the group has so far not agreed on a follow-up deal.
“A rising stockpile at a time of an ongoing wintering period is the biggest stumbling block for rubber prices,” said a Japanese trading source.
The Tokyo Commodity Exchange rubber contract for September delivery finished 3 yen higher at 179.3 yen (US$1.67) per kg, ending the week with a 2.6% decline.
The front-month rubber contract on Singapore’s SICOM exchange for May delivery last traded at 134.5 US cents per kg, up 0.5 cent.
Malaysia’s rubber products exports fell 4.1% in February from a year earlier to 2.0 billion ringgit (US$516.80 million), government data showed on Thursday.
Shanghai futures exchange was closed for a public holiday.
(US$1 = RM3.8700)
(US$1 = 107.3100 yen)
