TOKYO, Jan 22 (Reuters) – Key Tokyo rubber futures inched
lower on Thursday, dampened by a firm yen, but physical demand
from China helped lend some support.
* The benchmark Tokyo Commodity Exchange rubber contract for
June delivery <0#JRU:> wiped out earlier gains to end down 0.7
yen, or 0.5 percent, at 141.3 yen per kg. Rubber futures were
supported earlier by a rebound in stocks and oil prices, rising
as high as 145.3 yen. They fell as low as 137.2 yen.
* Nearby months, which were lower earlier in the day, mostly
firmed later. Analysts said the nearby months were supported as
traders kept long positions open, aiming to take physical
delivery at the January contract’s expiry on Jan. 26.
* The yen held near a 13-½ year high of 87.10 yen hit on
Wednesday, trading up 0.4 percent against the U.S. dollar at
89.15 yen , as investors remained extremely risk averse.
* Tokyo shares <.N225> rose nearly 2 percent. [.T]
* U.S. crude futures rose 80 cents at $44.37 per
barrel, extending a near 7 percent rise on Wednesday. [O/R]
* The market’s downside was limited by news earlier in the
week that rubber producing countries are ready to step up efforts
to support prices. The approach of the wintering dry season in
the Asian producing countries was another supportive factor.
* The Thai government said it would buy rubber for its
stockpiles and increase planned corn and crude palm oil purchases
to shore up prices as part of a package to support farmers and
help stimulate the economy.
* Ministers from the top three rubber producers — Thailand,
Indonesia and Malayasia — are to meet in Malaysia in February,
and a Malaysian minister said the three countries were prepared
to cut exports by up to 20 percent this year.
* Asian physical rubber prices were broadly lower, reflecting
bearish TOCOM sentiment.
* “The market is also waiting for government intervention
steps, which they said they would take but haven’t taken any
action on,” a trader in Thailand said. “The market wants to see
at what level the government will buy.”
* At the same time, traders said physical demand from China
was present ahead of the Lunar New Year, which begins on Jan. 26.
* Indonesian dealers said China has been buying SIR20 grades
from dealers in Singapore but there were no details on the
amount. A Sumatran-based dealer said March SIR20 was sold to
unspeficied buyers at 61.00 U.S. cents/pound late on Wednesday.
* “They have been in the market for some time but I wouldn’t
say they are buying in large quantities. These days, you just
have to be careful. China is buying hand to mounth,” said a
Jakarta-based dealer.
PRICES OF ASIAN PHYSICAL RUBBER COMPARED WITH WEDNESDAY
Grade Price Change
Thai RSS3 (Feb) $1.52/kg -$0.05
Thai RSS3 (Mar) $1.52/kg -$0.05
Thai STR20 (Feb) $1.45/kg -$0.05
Thai STR20 (Mar) $1.45/kg -$0.05
Malaysia SMR20 (Feb) $1.45/kg -$0.05
Malaysia SMR20 (Mar) $1.45/kg -$0.05
Indonesia SIR20 (Feb) $0.65/lb -$0.02
Indonesia SIR20 (Mar) $0.65/lb -$0.02
Thai USS3 46 baht/kg -3 baht
Thai 60-percent latex (drums, Feb) $1,200/tonne -$50
Thai 60-percent latex (bulk, Feb) $1,080/tonne -$70

Source:  Reuters

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