Tokyo Rubber Futures Tumble as Oil Falls

Key Tokyo rubber futures tumbled 3.7 percent in early morning trade on Tuesday (April 12), hit by a drop in oil prices and the yen's rise, but a limited supply from Thailand will likely support the downside.
The key Tokyo Commodity Exchange rubber contract for September delivery was down 2.9 percent, or 13.7 yen, at 461.5 yen as of 0039 GMT. The contract plunged as low as 457.2 yen in the evening session on Monday (April 11), which is counted as part of the Tuesday regular session.
The lead contract last week posted its biggest weekly increase since the week ending on March 18.
"The yen's rise and a plunge in oil prices are affecting the rubber market. But limited supply from Thailand, where the market is closed due to a festival, will support the downside," said Hiyuki Kikukawa, a general manager at Nihon Unicom Inc in Tokyo, a trading company.
The most active Shanghai rubber contract for September delivery rose 385 yuan to close at 37,065 yuan ($5,672) per tonne on Monday (Apr.11). Volume stood at 501,028 lots.
Brent and U.S. crude fell more than $1.50 a barrel on Tuesday (Apr.12) in Asian trade as long-term commodity bull Goldman Sachs advised investors to lock in trading profits before oil and other markets reverse.
Stock prices mostly fell on Monday as energy shares sold off on lower oil prices, and as the earnings season onset was clouded by concern that company outlooks may fall short of expectations.
Car sales in China rose 6.5 percent to 1.35 million units in March, recovering from the lowest growth rate in two years in February but still well below the hectic pace seen last year.
Toyota Motor Corp on Monday (Apr.11) warned that the uncertain supply of parts from Japan could threaten its output of vehicles through July, the latest sign of trouble for the global auto industry stemming from the massive Japanese earthquake a month ago.
(Reuters, Tokyo, April 12, 2011)