TOKYO (Oct 1): Benchmark Tokyo rubber futures extended gains on Monday and hit a one-month high on the back of firm oil prices.
Brent crude oil prices rose to their highest since November 2014 ahead of US sanctions against Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), that kick in next month.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, also got support from a weaker yen against the dollar, which touched its lowest since the middle of November 2017.
A weaker yen makes commodities denominated in the Japanese currency cheaper for holders of other currencies.
Growth in China’s manufacturing sector sputtered in September as both external and domestic demand weakened, two surveys showed on Sunday, raising the pressure on policymakers as US tariffs appear to be inflicting a heavier toll on the Chinese economy.
“There are worries over adverse impact to rubber consumption from the US-China trade friction,” said a Japanese trading source.
The Tokyo Commodity Exchange rubber contract for March delivery finished 3.5 yen higher at 171.5 yen (US$1.51) per kg after hitting 172.1 yen earlier, the highest since Sept 3.
The front-month rubber contract on Singapore’s SICOM exchange for November delivery last traded at 133.7 US cents per kg, up 0.7 cent, staying relatively steady since mid-September.
Vietnam’s estimated rubber exports in the first eight months of 2018 rose 9.1% from a year earlier to 1.04 million tonnes, government data showed.
China’s financial markets are closed this week for the National Day holiday.
(US$1 = 113.9500 yen)
