Tokyo rubber futures lost ground on Tuesday as weak fundamentals and Technicals continued to weigh on the market, causing the key contract to hover near a one-year low marked late last week.
Rubber futures on the Tokyo Commodity Exchange fell across the board in the in anticipation of a further rise in supplies as major producers enter the peak production season. Demand remains thin although some traders say China, the world's largest consumer, could begin buying again if prices fall further.
The new benchmark TOCOM rubber contract for May delivery was trading at 193.4 yen, down 2.8 yen from Monday and up about 4 percent from the one-year low of 185.5 yen hit on Friday.
The contract, which debuted on Monday, has so far traded in narrow band between 192.8 yen and 195.5 yen. It is now trading at a level about 40 percent down from the year's high of 324.5 yen, reported on June 13, when fund buying and strong oil prices helped lift rubber. Rubber often benefits from high crude oil prices, which encourages a shift to natural rubber from synthetic rubber, a petroleum product.