TOKYO (Feb 16): Benchmark Tokyo rubber futures slid on Thursday on news that Thailand plans further sales of the commodity from state stockpiles to ease supply concerns following recent floods in its main rubber-growing area, while weaker Shanghai futures added to the selling pressure.
Thailand, the world's biggest producer and exporter of rubber, is expected to have sold 96,000 tonnes of the commodity at the auction held on Tuesday, an official at its rubber authority told Reuters on Wednesday, adding it will hold another auction for 125,000 tonnes in March.
The Tokyo Commodity Exchange (TOCOM) rubber contract for July delivery finished 3.5 yen, or 1.1%, lower at 316.2 yen (US$2.78) per kg.
The most-active rubber contract on the Shanghai futures exchange for May delivery extended losses in afternoon trade, tumbling 1,395 yuan to finish at 20,320 yuan (US$2,962.7) per tonne.
"Shanghai futures started plunging late afternoon without any fresh fundamental news," said Toshitaka Tazawa, an analyst with Fujitomi Co, pointing to position adjustments.
"If Shanghai prices drop below 20,000 yuan overnight, Tokyo market's recent bullish trend may change and prices may fall further."
The front-month rubber contract on Singapore's SICOM exchange for March delivery last traded at 222.0 US cents per kg, down 5.9 US cents.
(US$1 = 113.8100 yen)
(US$1 = 6.8586 Chinese yuan)