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TOCOM rubber drops to 10-month low as speculators step up selling (20-08-2015)

 

TOKYO (Aug 18): Benchmark Tokyo rubber futures dropped to their 10-month low on Tuesday as speculators stepped up selling on increasing worries about demand from the world`s top consumer China, while slumping Chinese shares and weaker oil prices reinforced negative sentiment.  

TOKYO (Aug 18): Benchmark Tokyo rubber futures dropped to their 10-month low on Tuesday as speculators stepped up selling on increasing worries about demand from the world`s top consumer China, while slumping Chinese shares and weaker oil prices reinforced negative sentiment.

The Tokyo Commodity Exchange rubber contract for January delivery <0#2JRU:> finished 3.3 yen, or 1.7 percent, lower at 186.9 yen ($1.50) per kg, after hitting a low of 185.9 yen, the lowest since Oct. 17, 2014, earlier in the session.

“Speculators accelerated selling while end users stayed away from the market due to slowing physical demand,” said Jiong Gu, an analyst with Yutaka Shoji Co.

“The market was dominated by bearish mood, with worries about China`s demand and its volatile equities market.”

Chinese stocks plunged as the yuan weakened against the dollar, reigniting fears that Beijing may be intent on a deeper devaluation of the currency despite the central bank`s comments that it sees no reason for a further slide.

The most-active rubber contract on the Shanghai Futures Exchange for January delivery fell 190 yuan to finish at 12,025 yuan ($1,881.02) per tonne.

The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, have been on the downtrend for more than two months, hit by concerns about slowing demand in China and slumping commodity prices such as oil.

U.S. oil prices fell to their lowest in more than six years on Tuesday as traders braced for lower refinery consumption after the U.S. summer, while Asia`s weakening economies and high global production stoked concerns about oversupply.

“Unless we see signs of pick-up in global demand or governments` actions in producer countries to shore up the prices, the market is expected to remain under pressure,” Gu said.

The front-month rubber contract on Singapore`s SICOM exchange for September delivery last traded at 128.9 U.S. cents per kg, down 3.2 cent.

($1 = 124.2800 yen)
($1 = 6.3928 Chinese yuan)

http://globalrubbermarkets.com/35608/tocom-rubber-drops-to-10-month-low-as-speculators-step-up-selling.html

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