Tocom rubber futures settle 2.7% lower as Asian equities tumble after a selloff on Wall Street overnight due to fears about the U.S. economy following weak manufacturing data. Tocom rubber is oversold and should be trading around Y250/kg, as supply is tight amid the low-production season in major producing countries, says Luckchai Kittipol, chief executive of Thai Hua Rubber Public Co., the third-largest natural rubber exporter in Thailand.
“There’s too much speculation and Tocom rubber is now cheaper than physical RSS3 prices. Even though there is talk about high stockpiles in China, much of it will be going to the Chinese national reserves. In Thailand, government stockpiles are also unlikely to be sold due to the current political stalemate, so it’s not so much an issue of supply,” he adds. Benchmark July rubber settles Y6.1 lower at Y220.8/kg, off a fresh 17-month low of Y220.3/kg.
Source: Dow Jones
