TOCOM falls on weak Shanghai, flat demand

BEIJING: Benchmark Tokyo rubber futures fell on Tuesday on weak Shanghai, as flat demand weighed on prices.

Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, have been under pressure from high inventories and weak demand in recent months.

"Car sales in China in 2018 have fallen. December rubber imports also dropped significantly, both indicating sliding demand from trade and the downstream sector," said Zhao Wenting, analyst with Dongwu Futures.

"The market is not very optimistic about demand in 2019. Rubber prices are expected to continue to fall in the medium and long term," Zhao said.

The Tokyo Commodity Exchange rubber contract for June delivery  finished 0.7 yen ($0.0064) lower at 182.8 yen per kg.

TOCOM's technically specified rubber (TSR) 20 futures contract for July delivery fell 2.5 yen to close at 151 yen per kg.

The most-active rubber contract on the Shanghai futures exchange for May delivery fell 60 yuan ($8.89) to finish at 11,505 yuan per tonne.

The front-month rubber contract on Singapore's SICOM exchange for February delivery last traded at 134.2 U.S. cents per kg, up 0.1 cent.