Rubber Prices Closed Down Four Consecutive Days

Weakening rubber prices continued at the end of the fourth day of trading in a row on Wednesday (20/09/2017), due to a number of factors including the sluggish number of economic indicators China.

The price of rubber for delivery in February 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed down 0.56% or 1.20 points at 212.20 yen per kilogram (kg), the new all-time low.

Earlier, the price of rubber opened with a decline of 1.12% or 2.40 points at 211 yen per kg position, after trading on Tuesday (19/9) ended down more than three percent.

Naohiro Niimura, partner of Market Rist Advisory, said the continued weakening of rubber prices was influenced by sluggish demand indicators from China.

"Some indicators of China's demand, such as fixed asset investment and industrial production, are weak," he said, as quoted by Bloomberg. That raises concerns that commodity consumption will slow down.

China's economy unexpectedly slowed further last month, after a lackluster performance in July. Industrial production data, retail sales, and fixed asset investments experienced sluggish gains.

As reported by Bloomberg, industrial production rose 6% in August compared with a year earlier.

This figure is smaller than the average predictions of economists of 6.6 %% and achievement in July of 6.4%. Not only that, the industrial production figures last month is the slowest rate of increase this year.

Meanwhile, retail sales rose 10.1% from a year earlier, lower than the 10.5% forecast and July's 10.4%. Retail sales also experienced sluggish gains this year.

The fixed asset investment in urban areas rose 7.8% during the first eight months of this year compared to the same period the previous year. This figure is smaller than the predicted increase of 8.2% as well as slowest since 1999.

Also weighing on rubber prices, stocks monitored by the Shanghai Futures Exchange rose 2% to 430,735 tonnes on Sept. 14, the highest level since at least 2003.

Meanwhile, the yen exchange rate rose 0.13% or 0.14 points to 111.45 position per US dollar at 14:22 pm, after on Tuesday (19/9) ended up depreciating 0.02% at 111.59 position.