TOKYO: Key Tokyo rubber futures fell more than 3 percent on Monday on deepening concerns about demand after news that flooding in Thailand has spread further into industrial provinces that host automotive plants.
The key Tokyo Commodity Exchange rubber contract for April delivery fell 8.9 yen, or 3.1 percent, to settle at 284.6 yen per kg. The benchmark contract fell as low as 283.8 yen in afternoon trade.
The most active Shanghai rubber contract for January delivery fell 3.2 percent to 26,540 yuan per tonne on Monday from 27,410 yuan on Friday. Volume stood at 1.53 million lots.
"The uncertainty surrounding the floods in Thailand is weighing on the market. Car output will continue to decline unless the situation in Thailand improves," said Kazuhiko Saito, chief commodity analyst at trading company Fujitomi.
The volume of open interest has been falling due to the prospect of sluggish demand and dropped below the 20,000 lots-mark on Friday last week for the first time since Sept 21.
Brent crude rose above $113 on Monday, gaining for a third straight day as hopes of oil demand growth during winter overshadowed concerns about the European debt crisis.
Floodwater encircled two industrial estates in the east of Bangkok on Monday.
Suzuki Motor Corp's car production in Japan may be affected from December depending on the supply of parts to its tier-one suppliers from Japanese chipmaker Rohm Co's flooded factory in Thailand, its CEO said on Monday.
Copyright Reuters, 2011
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