BANGKOK: Tokyo rubber futures fell 4 percent to a one-week low on Monday as weaker oil prices and falling Shanghai rubber futures triggered heavy selling by funds, but limited physical supply in producing counties helped limit losses, dealers said.
The benchmark rubber contract on the Tokyo Commodity Exchange for October delivery fell 10.2 yen to settle at 367.9 yen ($4.503) per kg. It fell as low as 15.1 yen, or 4 percent, to an intra-day low of 363.0 yen, the lowest since May 13.
"Funds sold contracts heavily after seeing the oil price drop. Small investors also sold to take profits and then stay away from the market to avoid risks," said a Tokyo-based dealer.
US crude slipped by $2 to below $100 a barrel on Monday as investors flocked to the dollar on renewed concern over the euro zone debt crisis.
Traders said falls in Shanghai rubber futures may reflect concern about a drop in demand in China, the world's biggest rubber consumer, and that added to the downward pressure on TOCOM prices.
The most active Shanghai rubber contract for September delivery fell 655 yuan to settle at 30,830 yuan ($4,748.128) per tonne.
However, TOCOM prices were supported by limited physical supply and that stopped prices from falling below a key psychological support level of 360 yen per kg, dealers said, and they expected a bounce higher on Tuesday.
Farmers in Thailand, the world's biggest rubber producer and exporter, have resumed tapping since late April, but rubber supply has not got back to normal as unseasonably heavy rain has hit major rubber areas in the south, disrupting tapping, traders said.
No comments:
Post a Comment