TOCOM ends down 4% at 2-month low

Benchmark Tokyo rubber futures ended down 4% at a two-and-a-half month low on Thursday, in line with weak Shanghai futures and low oil prices.

Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, fell 6% over the past two sessions, and are likely to come under further selling pressure, market sources said.

Most Chinese commodities futures fell on Thursday, amid cautious sentiment caused by a supply glut for some industrial metals and a possible US interest rate hike.

Oil prices fell on Thursday, pulled down by rising US crude inventories, a stronger dollar and surging output from Iran to Europe and Asia.

"There's a growing sense of oversupply for industrial commodities in China and elsewhere," a source with a Tokyo-based dealer said, adding that the rubber market is likely to face further downward pressure in the coming days.

The Tokyo Commodity Exchange rubber contract for October delivery <0#2JRU:> finished 6.7 yen lower at 161.8 yen (US$1.47) per kg. It earlier touched 161.7 yen, the lowest since March 3.

The US dollar was quoted near a three-week high of 110.20 yen, compared with 109.52 yen on Wednesday afternoon, helped by renewed expectations for a June interest rate hike by the US Federal Reserve.

The most-active rubber contract on the Shanghai futures exchange for September delivery fell 420 yuan to finish at 10,845 yuan (US$1,658) per tonne.

The front-month rubber contract on Singapore's SICOM exchange for June delivery last traded at 131.5 US cents per kg, down 3.8 cents.