TOCOM slips to 2-month low following Shanghai tumble

TOCOM slips to 2-month low following Shanghai tumble
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TOKYO (March 8): Benchmark Tokyo rubber futures slipped to the lowest in more than two months on Wednesday as Shanghai futures continued to decline amid concerns over rising inventories in the world's biggest rubber consumer.

"Tokyo rubber prices have apparently peaked out and are expected to decline further on a weakening Shanghai futures market," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

Shanghai futures have been under pressure due to higher inventories and worries about slower growth in China's economy, he added.

The Tokyo Commodity Exchange (TOCOM) rubber contract for August delivery finished 11 yen, or 4.1%, lower at 258.4 yen (US$2.27) per kg, after hitting the lowest since Dec 30 of 257.6 yen earlier in the session.

The most-active rubber contract on the Shanghai Futures Exchange for May delivery fell 835 yuan to finish at 17,780 yuan (US$2,574.20) per tonne. It also touched the lowest intra-day level since Dec 29 of 17,660 yuan earlier in the session.

China unexpectedly posted a rare trade deficit in February as imports surged far more than expected to feed a months-long construction boom, driven by commodities from iron ore and copper to crude oil and coal.

The front-month rubber contract on Singapore's SICOM exchange for April delivery last traded at 199.0 US cents per kg, down 9.0 US cent.

(US$1 = 113.9300 yen)
(US$1 = 6.9070 Chinese yuan)