BANGKOK, March 6 (Reuters) – Tokyo rubber futures fell as much as 2.5 percent to a one-week low on Tuesday as investors remained cautious after China trimmed its growth forecast for this year, while weaker oil also pressured prices, dealers said.
The benchmark rubber contract on the Tokyo Commodity Exchange for August delivery fell 5.8 yen to settle at 332.6 yen ($4.09) per kg. It dropped to an intra-day low of 330.1 yen, the lowest since Feb. 28.
The most-active Shanghai rubber contract for May delivery fell 390 yuan to finish at 28,530 yuan ($4,500) per tonne.
The front-month April contract on SICOM exchange was last traded at 377.0 U.S. cents per kg, down 2.6 cents.
“China’s plan to trim its growth caused fears about falling demand for rubber and oil prices did not play a supportive role, putting rubber prices under pressure,” one dealer said.
Chinese Premier Wen Jiabao on Monday cut his nation’s growth target to 7.5 percent for 2012 to give the economy more room to slow down if needed while the government carries out promised economic and welfare reforms ahead of a looming leadership transition.
Brent crude slipped towards $123 on Tuesday, reversing earlier gains as investors began a sell-off on worries about demand from slowing economies in China and Europe.
However, dealers said support from limited supply in major producing countries helped TOCOM prices finish above a major support level of 330 yen.
Supply in Thailand and Malaysia, the biggest and the third-biggest producers respectively, are falling as these countries are in the dry season, when rubber trees produce less latex.
Supply will tighten further in April, when rubber trees completely stop producing latex and farmers also stop tapping.
($1 = 81.4100 Japanese yen)
($1 = 6.3067 Chinese yuan)
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