TOKYO (Aug 5): Benchmark Tokyo rubber futures hit their lowest in a week-and-a-half on Tuesday as data showed the outlook for economic growth in top buyer China was still murky, but technical charts pointed to a possible rebound, traders said.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, have plunged more than a quarter this year on lingering worries about demand in China and high stockpiles.
The Tokyo Commodity Exchange rubber contract for January delivery <0#2JRU:> finished 1.7 yen lower at 204.6 yen per kg, its lowest settlement since July 25.
Growth in China’s services sector slowed sharply in July to its lowest level in nearly nine years, a private sector survey showed earlier on Tuesday, indicating a recovery in the broader economy is still fragile.
The data pushed Japan’s Nikkei share average to a 1-1/2-week low and caused Chinese shares to slip.
Thailand’s military government will encourage farmers in the world’s biggest rubber producer and exporter to cut down more rubber trees in a bid to restrict supply to help shore up prices, a senior government official said on Tuesday.
“While fundamentals had some impact today, it was technicals that kept the market around 205 (yen),” said a trader in Kuala Lumpur, who added the price could move higher, towards 209-210 yen, since it was under the Ichimoku cloud.
The most-active rubber contract on the Shanghai futures exchange for January delivery fell 85 yuan to finish at 15,480 yuan per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 168.60 U.S. cents per kg, down $1.40.
– Reuters
