TOCOM plunges 4pc on worsening trade war, posts 8pc weekly fall

Fawad Maqsood August 2, 2019

TOKYO: Tokyo Commodity Exchange (TOCOM) futures plunged 4% on Friday, extending losses into a sixth straight session, as investors worried about weaker global demand from escalating US-Sino trade war, leading to the biggest weekly loss since March 2018.

* The benchmark TOCOM rubber contract for January delivery  finished 6.8 yen, or 4.0%, lower at 168.5 yen ($1.58) per kg, after touching the lowest since Dec. 26, 2018 of 166.9 yen earlier in the session.

* For the week, it booked an 8.1% slide, marking a second consecutive weekly loss.

* US President Donald Trump said he plans to impose a 10% tariff on $300 billion of Chinese imports from Sept. 1 and could raise tariffs further if Chinese President Xi Jinping fails to move more quickly to strike a trade deal.

* The most-active rubber contract on the Shanghai futures exchange for September delivery slumped 300 yuan to finish at 10,340 yuan ($1,490) per tonne, the lowest close in about one year.

* “Trump’s message sent down all financial markets, including stocks, oil and rubber,” said Toshitaka Tazawa, an analyst at commodities broker Fujitomi Co, pointing to deepened worries about weaker demand in China.

* “Also, the TOCOM’s forward months contracts have been under pressure as local tyre demand are expected to fall after the planned hike in Japan’s consumption tax in October,” he added.

* Oil prices rose around 2% on Friday, regaining ground after the biggest falls in years as US President Donald Trump imposed more tariffs on Chinese imports, intensifying the trade war between the world’s two biggest economies and crude consumers.

* Japan’s benchmark Nikkei stock average hit a six-week low on Friday after US President Donald Trump unveiled plans to impose new tariffs on China, reviving trade war concerns and slugging exporter and manufacturing firms.

* The US dollar was quoted around 106.89 yen, compared with around 109.17 yen on Thursday afternoon

* Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.7% from last Friday, the exchange said on Friday.

* TOCOM’s technically specified rubber (TSR) 20 futures contract for February delivery closed down 0.2 yen at 148.0 yen per kg

* The front-month rubber contract on Singapore’s SICOM exchange for September delivery last traded at 131.0 US cents per kg, down 0.5%, hovering at the lowest since late January.

Copyright Reuters, 2019

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