Key Tokyo rubber futures slumped 5 percent on Thursday on weakness in the oil market and wariness over demand, while a bearish technical outlook on rising supplies from producing countries further weighed on sentiment. The benchmark TOCOM rubber futures for October delivery settled down 21 yen at 362.2 yen per kg, down 5.4 percent from Wednesday's settlement.
The most active Shanghai rubber futures contract for September delivery fell 1,385 yuan or 4.4 percent to close at 29,745 yuan $4,581.920) per tonne from Wednesday's close of 31,130 yuan. Volume stood at 1.04 million lots. "With oil prices trading like yesterday and today, it hurt sentiment in rubber," said a technical analyst at a Japanese securities firm.
"The market failed to top key resistance yesterday, and having fallen below a 200-day moving average today, it looks weak technically," he said. The 200-day moving average stood at 378.1 yen on Thursday. The analyst said the market's next target was 335 yen, the low after a destructive earthquake and tsunami ripped through north-eastern Japan on March 11. "With producer countries starting tapping, supplies will weigh on sentiment and prices are likely to fall. At least, 400 yen looks like a cap for now," he said.