Key TOCOM rubber futures recouped some losses to end down 0.6 percent on Monday in holiday-thinned trade after the yen weakened, but declines in oil and other commodity prices after news of Osama bin Laden's death prompted investors to take profits. The key Tokyo Commodity Exchange rubber contract for October delivery settled down 2.1 percent at 386.8 yen per kg.
The contract fell heavily following Japan's devastating March 11 earthquake and tsunami slashed auto output, raising concerns on demand for rubber. "The market started lower, tracking losses in Shanghai on Friday, but a further fall is unlikely as the TOCOM prices are a lot cheaper compared to those in Singapore and physical prices," said a trader.
"We think the TOCOM market has almost hit the bottom." Oil and gold fell on Monday, dipping by as much as 2 percent after news of al Qaeda leader Osama bin Laden's death reduced some of the risk premium that has been underpinning commodities prices. Markets across large parts of Asia and much of Europe were closed for the May Day and Labour Day holidays, reducing the number of market participants and making for volatile trade.
Japanese financial markets were closed on Friday for a national holiday. They will be closed from Tuesday through Thursday this week, and will reopen on May 6.
China's stock, money, foreign exchange and commodities futures markets are closed on Monday for a public holiday. Trading will resume on Tuesday, May 3. Last Friday, the most active Shanghai rubber contract for September delivery fell 2.7 percent to close at 31,860 yuan per tonne. Volume stood at 882,804 lots.Japanese new vehicle sales in April halved, sinking to the lowest monthly tally on record, as domestic automakers felt the full brunt of the earthquake that caused unprecedented disruption to car production.
The outlook for supply remains cloudy. Global natural rubber production for 2011 may come in at 10.025 million tonnes, lower than an earlier forecast of 10.060 million tonnes due to output revisions in member countries, the ANRPC said on Thursday. Indonesia will export a third more rubber this year to China as demand from Chinese tyre makers rises, the Indonesian Rubber Association said on Thursday.