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TOKYO, Sept 5 (Reuters) – Tokyo rubber futures closed down more than 2 percent on Friday, near the day’s trough, as part of a broad decline in commodities triggered by a renewed sell-off in U.S. stocks on worries about the health of the economy.
* The decline pared the previous day’s 2.7 percent jump on a technical bounce.
* The key Tokyo Commodity Exchange rubber contract for February delivery <0#JRU:> finished at 308.6 yen per kg, down 7.9 yen or 2.5 percent, just a touch above the day’s low of 308.2 yen. The day’s peak was 312.6 yen.
* U.S. crude oil tumbled to hover above $106 per barrel after settling at $107.89 on Thursday as worries about the U.S. economy overshadowed a surprise drop in weekly U.S. crude oil stocks.
* The TOCOM rubber market has been volatile this week, with views spread between bearishness due to signs of a slowdown in the U.S. economy and bullish factors on the supply side, including a prolonged political crisis in Thailand, the world’s top producer.
* On Thursday, the February contract closed at the day’s high of 316.5 yen in a late rally led by dealers’ short-covering. It had hit a one-week low of 306.4 yen on the same day. On Monday the contract touched a one-month high of 324.9 yen.
* A level around 307 yen is forming as a floor given the commodity’s relatively strong fundamentals, said a manager at a Japanese brokerage.
“Rubber comes under pressure whenever selling hits other commodities. But it’s been basically range-bound. Selling is lined up when it gets close to 320 yen. But buying emerges at a level below 310 yen,” the manager said.
* A national referendum proposed by Thai Prime Minister Samak Sundaravej to end a political crisis was dismissed by critics on Friday as a stalling tactic that would resolve little and simply prolong the unrest. [ID:nBKK228083]
* In the physical market, a weakening Thai baht against the dollar undermined prices denominated in the U.S. currency. But the commodity’s fundamentals are firm due partly to solid demand from Japanese users.
Rubber inventories in Japan are on the decline, keeping the TOCOM market in backwardation.
PRICES OF ASIAN PHYSICAL RUBBER COMPARED WITH THURSDAY
Grade Price Change
Thai RSS3 (Oct) $2.96/kg -$0.05
Thai RSS3 (Nov) $2.96/kg -$0.05
Thai STR20 (Oct) $2.94/kg -$0.03
Thai STR20 (Nov) $2.94/kg -$0.03
Malaysia SMR20 (Oct) $2.96/kg -$0.01
Malaysia SMR20 (Nov) $2.96/kg -$0.01
Indonesia SIR20 (Oct) $1.33/lb -$0.01
Indonesia SIR20 (Nov) $1.33/lb -$0.01
Thai USS3 95 baht/kg unchanged
Thai 60-percent latex (drums, Oct) $2,000/tonne +$50
Thai 60-percent latex (bulk, Oct) $1,860/tonne +$10
Source: Reuters