Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, surrendered earlier gains to close lower on Wednesday, as a risk-off mood weighed on Shanghai futures and Asia shares. Risk appetite had soured after British lawmakers crushed Prime Minister Theresa May's European Union divorce deal, forcing the parliament to decide within days whether to back a no-deal Brexit or seek a last-minute delay.
The benchmark Tokyo Commodity Exchange (TOCOM) rubber contract for August delivery finished 2.1 yen, or 1.1 percent, lower at 197.1 yen ($1.8) per kg. It rose to 201.2 yen earlier in the session. The most-active rubber contract on the Shanghai futures exchange for May delivery fell 185 yuan to finish at 12,005 yuan ($1,789) per tonne, after hitting an about 3-week low of 11,970 yuan earlier in the session.
TOCOM's technically specified rubber (TSR) 20 futures contract for September delivery closed up 0.2 percent at 170.7 yen per kg The front-month rubber contract on Singapore's SICOM exchange for April delivery last traded at 146.7 US cents per kg, unchanged from the previous session. "Growing uncertainty over Brexit prompted selling in the Shanghai and Tokyo markets," said Satoru Yoshida, a commodity analyst with Rakuten Securities. "Stable and higher risk appetite are needed for the TOCOM to keep a key 200 yen mark," he said.
Asian shares drifted lower on Wednesday as a risk-off mood settled on markets, while Japan's benchmark Nikkei stock average fell 1 percent as weak machinery orders dragged down shares of machinery makers and exporters.