Shanghai tumble drags TOCOM to near 2-month low

Benchmark Tokyo rubber futures hit a near two-month low on Wednesday, tracking a plunge in Shanghai futures, amid worries over rising production and high inventories in consuming countries.

Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, touched 180 yen earlier, the lowest intraday level since April 18.

The most-active rubber contract on the Shanghai futures exchange for September delivery fell to 10,600 yuan (US$1,655), the lowest intraday level since July 2016, before ending the day at 10,835 yuan per tonne.

"The market is awash with supplies from Indonesia, Malaysia among others," said a Japanese trading source.

The Tokyo Commodity Exchange rubber contract for November delivery finished 5.2 yen lower at 181.3 yen (US$1.64) per kg, after touching 180 yen earlier, the lowest since April 18.

The front-month rubber contract on Singapore's SICOM exchange for July delivery last traded at 137.5 US cents per kg, down 2.6 cents.

(US$1 = 110.5400 yen)

(US$1 = 6.4044 Chinese yuan)