[Dow Jones] Tocom rubber futures settle 1% lower, reversing four days of gains, as markets in Asia pressured today by purchasing managers” index for China showing slowdown in manufacturing growth, sparking concerns of potential economic slowdown in world”s biggest consumer of rubber. However, Tocom rubber still in backwardation with gains in most nearby, middle months; August contract hit first limit-up of Y10 at one point, prompting trading halt. Tocom revising first circuit breaker for rubber to Y10 in June from Y20 in May, but traders note recent volatility prone to wide price swings beyond Y10. “The market has been far too speculative recently; the backwardation is too steep at this time of the year; even if spot supplies are tight, the forward contracts are oversold,” says veteran Tocom trader in Bangkok. Singapore-based Phillip Futures says Tocom rubber to take cues from crude oil prices, resistance at Y295/kg. Benchmark November rubber contract settles Y2.9 lower at Y282.2/kg, off intraday low of Y280.4/kg.

Source: Dow Jones

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