TOKYO: Benchmark Tokyo rubber futures closed lower on Tuesday after hitting a six-month high earlier, following a plunge in oil prices and Japanese equities, and a stronger yen, brokers said.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, have recovered some strength recently due to worries over lower production in flood-hit Malaysia and Thailand, but weak demand especially in top consumer China has largely remained unchanged, they said.
The Tokyo Commodity Exchange rubber contract for June delivery finished 0.2 yen lower at 214.2 yen per kg. It hit an intraday high of 215.5 earlier, the highest since July 3.
“A steep fall in the Nikkei 225 and a stronger yen put pressure on TOCOM,” said a Tokyo-based broker.
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Japan’s Nikkei benchmark tumbled 3 percent on Tuesday, as uncertainty surrounding Greece’s future in the euro zone and slumping oil prices dampened risk appetite, while a stronger yen hit exporters’ shares.
Oil extended losses on Tuesday to touch fresh 5-1/2-year lows, following a 5 percent plunge in the previous session as a slew of bearish factors added to supply woes.
The U.S. dollar was quoted around 118.92 yen, down from around 119.45 yen early on Tuesday, as the flight to safety drove investors into the arms of the yen.
Crude rubber inventories at Japanese ports stood at 12,987 tonnes as of Dec. 20, up 15.1 pct from 10 days earlier, data from the Rubber Trade Association of Japan showed on Tuesday.
The most-active rubber contract on the Shanghai futures exchange for May delivery rose 260 yuan to finish at 13,625 yuan per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for February delivery last traded at 150.70 U.S. cents per kg, down 0.6 cent.
– Reuters
