Key Tokyo rubber futures fell to their lowest level in nearly three months on Tuesday as investor sentiment was hurt by a drop in oil prices and concerns about the economy. The recent sell-off has caused technical charts to worsen, and they now suggest a downtrend towards 140 yen per kg, traders said. The key Tokyo Commodity Exchange rubber contract for November delivery fell 4.8 yen, or 3 percent, to 152.9 yen per kg.
It earlier touched 151.0 yen, the lowest for any benchmark since March 31. "Rubber followed other commodities lower," said a manager at a Japanese trading company, adding that some fund managers started building up fresh short positions, eyeing 140 yen as a near-term target.
The World Bank said on Monday that prospects for the global economy remained "unusually uncertain" as it cut 2009 growth forecasts for most economies, adding to concerns of a slower turnaround. The yen extended recent gains against the dollar - another negative for the Tokyo rubber market.
A higher yen deflates yen-based commodity futures prices. Thai rubber exports fell 19.6 percent in May from a year earlier due to limited supply, in part due to government policy, and weaker demand from the car industry, according to official data and traders on Tuesday.
Underlining a downtrend in exports by major producers, the head of the Malaysian Rubber Board said on Monday that exports by the world's No 3 producer may fall 10 percent this year, nearly double a plan to cut exports along with other producers, as global demand from the auto sector remains weak. A consultancy group said on Monday that moderate recovery in the world economy was expected to help reduce a global surplus in natural rubber in 2010 and 2011.
Comments
Comments are closed.