Benchmark Tokyo rubber futures ended lower on Monday (Mar 24) on stop-loss selling as weak Chinese economic data raised fears of falling demand, but the prospect of falling supply in major producing countries still lent support to TOCOM prices, dealers said.
The Tokyo Commodity Exchange rubber contract for August delivery fell 2.7 yen to settle at 232.0 yen ($2.27) per kg.
“Players sold contracts to stop losses after they saw weak Chinese PMI data, which raised their concerns about falling demand in the world’s biggest rubber consumer,” said a Bangkok-based dealer.
China’s Market/HSBC Purchasing Managers’ Index (PMI) fell to an eight-month low of 48.1 in March from February’s final reading of 48.5. The index has been below the 50 level since January, indicating a contraction in the sector this year.
However, traders said falling supply in major rubber producing countries was expected to provide support to TOCOM prices over the next few weeks.
Thailand, the world’s biggest rubber producer and exporter, is about to enter the dry season, when rubber trees shed their leaves and stop producing latex.
The most-active rubber contract on the Shanghai futures exchange for September delivery rose 185 yuan to finish at 15,220 yuan ($2,400)per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for April delivery last traded at 191.9 U.S. cents per kg.
Reuters
