Benchmark Tokyo rubber futures recovered from early falls and closed slightly higher on Tuesday, although high inventories and flat demand weighed on the market.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, fell 0.6 yen ($0.0054) earlier in the day, tracking weak Shanghai futures.
“Fundamentals are still weak. Sales of heavy trucks in August fell significantly, showing flat demand. Inventories in Qingdao climbed back by the end of August and then rubber imports in the same month jumped as well,” said Zhao Wenting, an analyst with Dongwu futures.
“There is surplus of supplies and demand is weak. And then there is worry that the Sino-U.S. trade conflict might escalate further.”
The Tokyo Commodity Exchange rubber contract for February delivery finished 0.8 yen higher at 166.7 yen per kg.
The most-active rubber contract on the Shanghai futures exchange for January delivery fell 85 yuan ($12.38) to finish at 11,930 yuan per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for October delivery last traded at 131.4 U.S. cents per kg, down 0.6 cents.
