TOCOM ends at 10-day low on weaker Shanghai

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TOKYO (Feb 6): Benchmark Tokyo rubber futures fell for a fifth straight session on Monday, giving up early gains on bargain-hunting and closing at a 10-day low, as weaker Shanghai futures weighed on market sentiment.

"Rubber markets in both Shanghai and Tokyo are in correction phase after a long and sharp rally since late last summer," said Satoru Yoshida, commodity analyst, Rakuten Securities.

Over the past four months, rubber prices have more than doubled in a wild swing propelled by China's cash-rich investors, underlining their ability to move markets after similar surges in commodities such as coking coal and iron ore.

"Tokyo market has been largely following Shanghai's move. All eyes will stay on which direction Shanghai is headed," Yoshida said.

The Tokyo Commodity Exchange rubber contract for July delivery finished down 2.1 yen, or 0.7%, at 298.9 yen (US$2.65) per kg, its lowest settlement since Jan 25. Earlier in the session, it rose to a high of 304.9 yen. It dived about 15% from last Monday's close.

Tokyo rubber futures, which hit their highest since 2011 early last week, reversed also on news that Thailand would auction rubber to ease supply worries and news of a TOCOM probe into rubber positions.

The most-active rubber contract on the Shanghai futures exchange for May delivery fell 350 yuan to finish at 20,080 yuan (US$2,926.56) per tonne.

The front-month rubber contract on Singapore's SICOM exchange for March delivery last traded at 215.8 US cents per kg, down 6.6 US cent.

(US$1 = 6.8613 Chinese yuan)
(US$1 = 112.6100 yen)