Chinese rubber falls

Shanghai rubber futures fell by 6 percent in the week ended on Friday, falling in line with Tokyo futures as ample physical supply conditions continued to undermine overall sentiment.
Chinese prices were also put under pressure as demand from Chinese end-users has fallen as they were buying more chemical products as substitutes for natural rubber. The most active March contract ended this week at 16,795 yuan ($2,139) a tonne, about 6.2 percent lower than a week ago.
"Trade on both spot and futures markets is quiet in China. Buyers are holding off, expecting a lower price," said Lin Hailiang, analyst at Great Wall Futures in Guangdong.
Rubber inventories monitored by the Shanghai Futures Exchange rose 75 tonnes to 59,375 tonnes in the week ended on Thursday, the exchange said on Friday, although analysts believed Chinese firms increased buying in the end of the year and the early of the next. Tokyo Commodity Exchange rubber futures fell to a fresh one-year low on Friday as weakness in other yen-based commodities induced heavy selling.
Speculative selling continued despite the International Rubber Consortium saying it may need to prevent a further fall of the rubber price. The benchmark Tokyo Commodity Exchange rubber contract for April delivery closed down 1.7 percent at 187.3 yen ($1.58) a gram from 190.5 yen ended on Wednesday.
On Friday, the key TOCOM contract fell as low as 185.5 yen - the lowest for a benchmark contract since November 11, 2005. Tokyo markets were closed for the Thanksgiving holiday on Thursday. Some Chinese analysts said overall futures prices, including Tokyo, have been undermined as end-users in China, the world's largest rubber consumer, were buying fewer natural rubber as they were shifting to chemical products.
"China's import of natural rubber in November is expected to fall further compared with past months, as buyers sought more chemical products as substitutes," said Lin Hui, analyst at China International Futures Corp in Shanghai.
Customs data showed Chinese natural rubber imports in October were around 130,000 tonnes, down from 169,085 tonnes in September. The country imported a total of 1.32 million tonnes of the commodity in the first 10 months, representing a 18.4 percent jump. "It is about sentiment. Buyers always hesitate to purchase products at when their prices are in a downtrend," Lin said.