Benchmark TOCOM rubber futures were poised for their biggest monthly fall since April, with the contract down on Friday (Aug 29) on global oversupply and worries over economic growth in top buyer China.
FUNDAMENTALS
The Tokyo Commodity Exchange rubber contract for February delivery had fallen 1.2 yen to 198.4 yen per kg by 0010 GMT – on track for a 6.5 percent drop in August.
The benchmark contract finished 0.5 yen lower on Thursday (Aug 28)
Japanese industrial output rose 0.2 percent in July, less than expected, after suffering the biggest drop since the March 2011 earthquake in the previous month, data released by the trade ministry showed on Friday (Aug 29).
Physical cargoes of tyre grade rubber from Thailand, Indonesia and Malaysia changed hands this week for forward shipments, but the purchases failed to help prices defy declines in benchmark Tokyo futures, dealers said on Thursday (Aug 28).
Activity in China’s vast factory sector likely weakened in August as demand faltered, a Reuters poll showed on Thursday (Aug 28), reinforcing expectations that further policy steps may be needed to keep economic growth on track.
The U.S. economy rebounded more strongly than initially thought in the second quarter with a bigger chunk of the growth driven by domestic demand in a bright sign for the future.
MARKET NEWS
The U.S. dollar was quoted around 103.72 yen early on Friday (Aug 29), dipping after investors bought the safe-haven yen as tensions between Ukraine and Russia flared up again.
Japan’s benchmark Nikkei stock average dipped 0.1 percent in Friday (Aug 29) trade, after finishing lower the previous day.
Copper prices fell on Thursday (Aug 28), under pressure from the escalating tensions in Ukraine and worse-than-expected euro zone economic sentiment, while falls in aluminium prices were kept in check by tightening availability of near-term supplies.
Brent crude oil fell and U.S. crude rose as ample global supply and lacklustre demand pressured the global benchmark while positive U.S. economic data supported oil prices in the world’s largest oil consumer.
Reuters, August 29, 2014
