TOCOM hits one-week low on oversupply worries

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TOKYO (Aug 28): Benchmark Tokyo rubber futures touched a one-week low on Tuesday, tracking weakness in Shanghai and Singapore futures, amid worries of oversupply despite floods in a key producing region in India.

Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, have barely got support from a projected output slowdown in India, the world's sixth biggest producer, whose output is likely to fall 13.5% from a year ago in the fiscal year to March 2019.

"There's concern about oversupply in the market as Shanghai stockpiles are on the rise," said a Japanese trader.

The Tokyo Commodity Exchange rubber contract for new February delivery ended at a one-week low of 172.2 yen, down 1.6% from its debut price of 175 yen on Tuesday.

The most-active rubber contract on the Shanghai futures exchange for January delivery fell 235 yuan to finish at 12,275 yuan (US$1,786) per tonne.

The front-month rubber contract on Singapore's SICOM exchange for September delivery was last traded at a near two-week low of 131.5 US cents per kg, down 1.6%.

(US$1 = 6.8740 Chinese yuan renminbi)