TOCOM plunges in line with Shanghai as supply worries ease

-A +A

TOKYO (Feb 17): Benchmark Tokyo rubber futures extended declines on Friday to close 6.3% lower, in line with Shanghai futures, as supply worries continued to ease following Thailand's planned sales of the commodity.

Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, hit their highest in more than five years late last month, with high prices weighing heavily on Japanese tyre manufacturers.

Bridgestone Corp, the world's biggest tyre maker, sees natural rubber prices remaining at high levels in the first half of 2017, followed by a gradual fall, Chief Financial Officer Akihiro Eto said on Friday.

But the market has come under pressure since Thursday on news that Thailand plans further sales of the commodity from state stockpiles following recent floods that curbed production.

The Tokyo Commodity Exchange rubber contract for July delivery finished 20 yen lower at 296.2 yen (US$2.61) per kg, which is also its lowest intraday level since Feb 7. It ended the week 5% lower.

The most-active rubber contract on the Shanghai futures exchange for May delivery fell 800 yuan to finish at 20,380 yuan (US$2,968) per tonne.

The front-month rubber contract on Singapore's SICOM exchange for March delivery last traded at 218 US cents per kg, down 6.5 US cents.

(US$1 = 113.3400 yen)
(US$1 = 6.8677 Chinese yuan)