Tokyo futures at 1-week low on weak data, oil

BANGKOK: Tokyo rubber futures hit their lowest in a week on Monday as weak US jobs data re-ignited concerns about the world economy and a possible drop in rubber demand, while falling oil prices added to downward pressure on prices, dealers said.

The benchmark rubber contract on the Tokyo Commodity Exchange for February fell 8.6 yen to settle at 360.9 yen ($4.7) per kg.

It slumped as much as 9 percent to an intra-day low of 360.0 yen, the lowest since August 26.

The most active Shanghai rubber contract for January delivery fell 955 yuan to finish at 32,795 yuan ($5,138) per tonne.

"Technical sentiment on TOCOM was not so good as it was weighed down by weaker US data as well as weaker oil prices, which raised concerns on possible falling demand on rubber," said a Bangkok-based dealer.

US employment growth ground to a halt in August, reviving recession fears and piling pressure on President Barack Obama and the Federal Reserve to provide more stimulus to aid the economy.

Brent crude fell below $112 a barrel on Monday, as fears of another US recession slowing fuel demand overshadowed supply concerns over a major shutdown of offshore oil production forced by Tropical Storm Lee.

Dealers said they expected TOCOM prices to find a support level at 360 yen per kg and could rebound on Tuesday as strong demand on the physical market should provide support.

Rising supply in major producing countries had brought down physical rubber prices to acceptable levels that attracted tyremakers to resume buying.

The price of benchmark Thai smoked rubber sheet (RSS3) was offered at $4.73 per kg, well below the record high of $6.4 per kg, hit early this year. It was forecast to stay at $4.65 per kg at the end of September.

Copyright Reuters, 2011