Benchmark Tokyo rubber futures fell to a 1-1/2-month low on Thursday, extending losses into a fourth straight session, pressured by sliding oil prices and disappointing target of export cuts set by Asia's top three producing countries.
Oil prices tumbled on Wednesday, with U.S. crude settling about 3 percent lower, after an unexpectedly large inventory build in the world's biggest oil consumer renewed worries about oversupply.
The International Tripartite Rubber Council (ITRC), a grouping of Indonesia, Thailand and Malaysia, will trim exports by an additional 85,000 tonnes from September to December this year, an Indonesian rubber industry official said on Thursday.
"In the original commitment, ITRC and its strategic partner, Vietnam, would cut exports by 700,000 tonnes. The allocation for the three countries was 615,000 tonnes and Vietnam 85,000 tonnes. But for some reason that couldn't be carried out, so ITRC will cut the full 700,000 tonnes up to December," Indonesian Rubber Association Chairman Moenarji Soedargo also told reporters.
The three nations had agreed to cut exports by 615,000 tonnes for six months from March in a move to lift prices that have tumbled amid excess supply to their lowest since the global financial crisis.
"The additional number looks disappointing though investors had low expectations for what producers can do," said Hiroyuki Kikukawa, general manager of research at Nissan Securities said.
The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery finished 2.2 yen, or 1.5 percent, lower at 149.5 yen ($1.49) per kg, after hitting its lowest since July 11 of 148.6 yen.
"If the TOCOM benchmark does not recover a key 150 yen level quickly, the market may test new lows," Kikukawa added.
The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, have been stuck within a narrow trading range between 145 and 165 yen since late May.
The August contract expired at 161.3 yen on Thursday.
Crude rubber inventories at Japanese ports fell 0.9 percent from the last inventory data to 8,519 tonnes as of Aug. 10, data from the Rubber Trade Association of Japan showed on Thursday.
The most-active rubber contract on the Shanghai futures exchange for January delivery dipped 310 yuan to finish at 12,315 yuan ($1,850.66) per tonne.
The front-month rubber contract on Singapore's SICOM exchange for September delivery last traded at 125.0 U.S. cents per kg, down 1.9 cents.
