TOKYO: Key Tokyo rubber futures tumbled 7.3 percent to a two-year low on Thursday while the Shanghai market closed down by its daily limit as fears over Europe's debt crisis intensified and worries of a decline in demand prompted investors to close positions.
The Tokyo Commodity Exchange rubber contract for April delivery settled down 19.8 yen or 7.3 percent at 252.7 yen, the lowest level since December 2009.
The most active Shanghai rubber contract for January delivery closed down by its daily limit at 24,490 yuan per tonne, down 4.6 percent. Volume decreased to 66,006 lots from Wednesday's 1.88 million lots.
"After the Shanghai market hit limit down after the open, Chinese investors turned to TOCOM to sell," said Naoki Asami, chief broker at trading house Kanetsu.
"With no imminent signs of the Thai government taking action to prop up prices, there is no reason for investors to turn bullish."
Europe's debt crisis, a slowdown in the Chinese economy and devastating floods in Thailand that have caused many Japanese carmakers to reduce output due to a shortage of parts have all hit the demand prospects for rubber.
Brent crude was steady above $112 a barrel on Thursday, after sharp falls a day earlier, as hopes of resilient oil demand from China partly offset growing concerns over Europe's debt crisis.
Copyright Reuters, 2011
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