BANGKOK (Aug 26): Tokyo rubber futures dropped 1.7 percent on Tuesday to a one-week low as weak equities and the prospect of rising supply due to the Thai government’s stock sales weighed on the market, dealers said.
However, firm oil prices still lent support, they said.
The newly-launched Tokyo Commodity Exchange rubber contract for February delivery fell 3.0 yen from its opening price to settle at 199.6 yen ($1.92) per kg.
Intra-day, it fell as much as 3.5 yen, or 1.7 percent, to 199.1 yen per kg, the lowest since Aug. 20.
“Fears of rising supply still lingered on the market, while weak equities also weighed on rubber prices,” a Tokyo-based dealer said.
Japan’s benchmark Nikkei average closed down 0.59 percent at 15,521.22 on Tuesday.
The Thai military government has approved a plan to sell its 200,000-tonne rubber stockpile, a senior government official said on Monday, aiming to cut storage costs and ending a stock overhang that has weighed on prices.
However, dealers said TOMCO prices were still supported by firm oil prices, which prevented a sharp fall in rubber futures.
Brent crude edged up towards $103 a barrel on Tuesday, rising for a second session, although persistent supply pressure and weak economic data in major consumer countries curbed gains.
The most-active rubber contract on the Shanghai futures exchange for January delivery fell 300 yuan to finish at 14,765 yuan ($2,399) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 164.1 U.S. cents per kg, down 2.3 cents.
(1 US dollar = 103.8700 Japanese yen)
(1 US dollar = 6.1531 Chinese yuan)
– Reuters
