The price of rubber fell by more than one percent in trading this morning (Wednesday, 2/8/2017), along with falling crude oil prices.
The price of rubber for delivery in January 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), fell 1.42% or 2.90 points to 202 yen per kilogram (kg) at 10:12 pm.
Previously, rubber prices opened down 0.05% at 204.80 yen per kg, after trading on Tuesday (1/8) ended down 0.39% or 0.80 point at 204.90 level.
Rubber prices had strengthened until early trading yesterday was buoyed by sentiment worries flood-induced supply disruptions in northeastern Thailand. However, the high reserve amount in China should suppress it.
"The amount of stock in China remains high, thereby weighing on market sentiment," said We Tan, marketing manager of Shanghai Reascent Industrial, as quoted by Bloomberg.
According to him, the market needs a better demand to offset the increase in supply.
Total rubber stocks monitored by the Shanghai Futures Exchange rose 0.8% to 382,768 tonnes on July 27, rising for an 8th straight week. The number of raw Japanese rubber stocks rose 12.9% to 7,592 tons.
In addition to pressing rubber, WTI oil price is observed further down 0.96% or 0.47 points to US $ 48.69 per barrel at 10:08 pm.
Crude oil prices moved back below $ 50 a barrel following an unexpectedly surge in US crude inventories.
On the other hand, today's yen exchange rate is observed to weaken 0.15% or 0.17 points to 110.53 yen per US dollar at 10:18 pm, after on Tuesday closed down 0.09% at 110.36.
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