Benchmark Tokyo rubber futures slipped on Tuesday to hit their lowest in near one week, as a stronger yen against the U.S. dollar, weaker global stocks and lean Shanghai rubber futures weighed on sentiment, dealers said.
“Weak equities market chilled investors’ appetite,” said Hiroyuki Kikukawa, general manager of research, Nissan Securities.
Asian shares slipped on Tuesday amid escalating trade tensions and concerns about tech firms, although regional index declines were modest compared with those of their Wall Street counterparts as investors focused on global growth prospects.
China’s tit-for-tat tariffs hurt the U.S. dollar, although the greenback saw some buying during early Asian trading on Tuesday to last trade at 105.93 yen, compared with a three-week peak of 107.01 hit last week.
The Tokyo Commodity Exchange (TOCOM) rubber contract for September delivery finished 1.5 yen lower at 180.1 yen ($1.7) per kg. Earlier in the session, it hit their lowest since March 28 of 176.7 yen.
The TOCOM futures, which set the tone for rubber prices in Southeast Asia, were also under pressure as producers’ efforts to curb exports have come to an end, Kikukawa said.
A group of three of the world’s top natural rubber producers agreed in December to cut exports by up to 350,000 tonnes in total from December until March in a bid to address declining global prices.
On further downside, Honda Motor Co Ltd’s sales in China fell 13.0 percent in March from a year earlier to 97,587 vehicles, impacted by a quality problem, the company said on Tuesday.
General Motors Co, meanwhile, said it will stop reporting monthly U.S. vehicle sales, saying the 30-day snapshot does not accurately reflect the market and will instead issue quarterly sales.
The most-active rubber contract on the Shanghai futures exchange for September delivery dropped 125 yuan to finish at 11,430 yuan ($1,818) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for May delivery last traded at 136.7 U.S. cents per kg, down 1 cent.
Source: Reuters