TOKYO, March 10 (Reuters) – Benchmark Tokyo rubber futures fell nearly 1 percent on Tuesday, ending at a one-month low as a yen regained some ground in late trade after hitting an eight-year low against the U.S. dollar and as investors worry over slowing demand in top consumer China.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, touched a one-month intra-day low of 206.6 yen on Monday, but still stood 20 percent higher than its lowest in more than five years hit last October.
The Tokyo Commodity Exchange rubber contract for August delivery finished 1.9 yen, or 0.9 percent, lower at 208.7 yen ($2) per kg, the lowest close since Feb. 5.
The TOCOM prices went up and down due to volatile currency market, said Satoru Yoshida, commodity analyst at Rakuten Securities.
The dollar hit an eight-year high versus the yen on speculation that the Federal Reserve would start lifting interest rates from mid-year, while central bank in Japan was busy easing policy by buying billions in government bonds.
The TOCOM benchmark touched a high of 211.8 yen, helped by the dollar’s gain to around 122 yen by mid-day, but it came under pressure after the yen recovered to around 121.6 yen in late afternoon, Yoshida said.
“Investors are bearish also because of concerns about weaker demand in China,” Yoshida added.
The pace of Chinese inflation unexpectedly picked up in February, but producer prices continued to slide, underscoring the intense pressure on profit margins at Chinese companies and adding urgency to policymakers’ efforts to find new ways to support growth.
Faced with faltering demand in China, Vietnam has been expanding its rubber export markets to India and Japan, reducing its reliance on China, the Vietnam Economic Times newspaper reported, citing industry sources.
India’s natural rubber imports in February jumped nearly 42 percent to 28,806 tonnes from a year earlier as lower prices in the world market prompted tyre makers to raise overseas purchases, a government official told Reuters.
The most-active rubber contract on the Shanghai futures exchange for September delivery declined 235 yuan to finish at 12,490 yuan ($1,995) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for April delivery last traded at 141.1 U.S. cents per kg, down 0.4 cent. ($1 = 6.2615 Chinese yuan renminbi) ($1 = 121.7400 yen) (Reporting by Yuka Obayashi; Editing by Gopakumar Warrier)
– Reuters
