TOKYO, April 17 (Reuters) – Tokyo rubber futures fell more than 2 percent to close a touch above 170 yen as waning technical support and soft oil prices combined to put pressure on the industrial commodity.
* The key Tokyo Commodity Exchange rubber contract for September delivery <0#JRU:> closed at the day’s low of 171.3 yen, down 4.5 yen, or 2.6 percent. The intra-day high was 177.4 yen.
* The benchmark is currently down 4.7 percent from a five-month high of 179.7 yen marked on Monday, when it was driven upwards by bullish technical factors.
* After failing to breach the key 180 yen level, the benchmark contract slipped to touch a one-week low of 170.1 yen on Wednesday.
* “Funds have stopped buying after the market failed to break above a key technical level, and unless oil prices rise sharply or the yen weakens significantly, it will be difficult for the market to test the 180 yen mark,” said a senior trader at a Japanese brokerage.
* The nearby contact looks set to be weighed down ahead of its expiry later in the month as the volume of dealers selling far exceeds speculator purchases, the senior trader said.
* He said dealers are selling RSS3 to buy SIR20 to take advantage of the price differences, prompting them to hedge by selling longer-dated futures contracts. Such moves have put a cap on the prices of these contracts, he said.
* On deals in the physical market, traders said Goodyear recently bought a July SIR20 cargo at 70.14 cents/lb, while Bridgestone purchased a cargo at 70.75 cents
* Physical market traders said major tyre makers were also offered June SIR20 at 70.50 cents but no deals were heard done.
* Oil inched down below $50 a barrel on Friday, paring Thursday’s 1.5 percent gain that came amid signs of an economic improvement in the United States. [O/R]
* The yen fell 0.2 percent against the dollar. A weaker yen inflates yen-based futures prices, helping to limit falls in rubber prices. [USD/]
* Japan’s Nikkei average gained 1.7 percent on Friday, although the benchmark marked its first negative week since early March. [.T]
* Physical rubber prices were mostly steady.

PRICES OF ASIAN PHYSICAL RUBBER COMPARED WITH THURSDAY
Grade Price Change
Thai RSS3 (May) $1.70/kg unchanged
Thai RSS3 (Jun) $1.70/kg unchanged
Thai STR20 (May) $1.66/kg +$0.01
Thai STR20 (Jun) $1.66/kg +$0.01
Malaysia SMR20 (May) $1.63/kg unchanged
Malaysia SMR20 (Jun) $1.63/kg unchanged
Indonesia SIR20 (May) $0.70/lb unchanged
Indonesia SIR20 (Jun) $0.70/lb unchanged
Thai USS3 53.5 baht/kg unchanged
Thai 60-percent latex (drums, May) $1,320/tonne unchanged
Thai 60-percent latex (bulk, May) $1,200/tonne unchanged

Source: Reuters

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