Rubber prices dropped more than 1% in late trading today, Monday (2/7/2018).
The price of rubber for delivery in December 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed down 1.42% or 2.50 points at 173.80 yen per kilogram (kg).
In fact, rubber prices had resumed its gains as it opened in the green zone with a rise of 0.11% or 0.20 points at 176.50 position, after ending up 0.63% or 1.10 points at 176.30 level on Friday trading (29 / 6).
According to Masayo Kondo, head of research firm Commodity Intelligence, the burgeoning stock exchange of stocks in China continues to expand.
The amount of rubber stocks monitored by Shanghai exchange rose 1.3% to 505,069 tons last week, the ninth consecutive weekly rise.
"Sluggish manufacturing data also added to concerns that a slowdown in China's economy could curb demand for rubber," Kondo added, as quoted by Bloomberg.
The China Bureau of Statistics (NBS) noted China's Purchasing Managers' Index (PMI) slowed to 51.5 in June, below analyst expectations of 51.6, and 51.9 in May.
The results are in line with recent data (credit growth, investment and retail sales) showing China's economic slowdown, as policy makers manage debt risk and heated up trade ties with the United States.
China's export demand index also contracted for the first time since February 2018, down 0.03% to 49.8 from the previous month.
"Domestic demand is weakening and external demand is facing pressure from an escalation of trade disputes between China and the United States," said Wen Bin, Senior Economist at Minsheng Bank, Beijing, as quoted by Reuters.
In line with rubber, West Texas Intermediate (WTI) oil prices for August delivery in August 2018 fell 0.93%, or 0.69 points, to $ 73.46 a barrel on the New York Mercantile Exchange at 13:46 pm.
Also weighing on rubber, the yen appreciated 0.05% or 0.06 points to 110.69 per dollar at 13.56 GMT, after ending down 0.24% or 0.26 points at 110.75 in trading Friday (29/6).
As is known, the strengthening of the Japanese yen exchange rate against the US dollar makes the price of commodities traded in this currency to be relatively more expensive for overseas buyers. As a result, demand for these commodities has the potential to decline.
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