TOKYO, June 19 (Reuters) – Key Tokyo rubber futures rose towards 160 yen on Friday in slow trade, helped by stronger crude oil prices and a recovery in the dollar against the yen.
* On Thursday, the benchmark contract dipped to its lowest in almost five weeks at 157.5 yen per kg as a firm yen weighed on investor sentiment. But the dollar recovered against the yen on Friday prompting earlier sellers to unwind positions.
* The key Tokyo Commodity Exchange rubber contract for November delivery <0#JRU:> settled at 159.5 yen per kg, up 1.3 yen or 0.8 percent from the previous day.
* It fell 5.3 percent on the week, marking the second week of retreat.
* “There is no significant activity in the rubber market. Prices have been basically hovering at around 160 yen in the past few days,” said Shuji Sugata, a manager in Mitsubishi Corp Futures and Securities’ research team.
“The 155-160 level is where we saw prices stop falling in late May, so that’s the technical support level,” he said.
* Traders said low open interest on TOCOM has kept both speculators and industry participants from trading actively.
* Open interest in TOCOM rubber futures fell to 24,603 lots on Friday, down 20 percent from 31,006 lots two months earlier.
* “Given such low open interest, the market has hardly any depth and only follows ups-and-downs in other markets,” Sugata said.
* Crude oil rose toward $72 a barrel on Friday, extending its gains of a day earlier on bullish U.S. economic data and supply concerns in OPEC member Nigeria. [O/R]
* The dollar climbed 0.3 percent to 96.80 yen, holding firm after Wall Street gained the previous day to break a three-day losing streak and prompted traders to cover their yen long positions across the board. [USD/]
* TOCOM said earlier this week that the launch of a new, faster trading platform in May together with the introduction of a circuit breaker and an extension in trading hours has had little impact on the rubber market. [ID:nSP13615]
* Japan’s crude rubber inventories fell 1.9 percent in the 10 days to June 10 to 9,933 tonnes, industry data showed on Friday. [ID:nT66748]
* In the physical market, prices were little changed, although irregular weather could lead to a supply shortage. In Indonesia, rubber trees are being hit by an earlier-than-usual dry season, which could impact output in the world’s second-biggest producer, an official at the country’s rubber association said. [ID:nJAK82903]
* There was a minor bright spot in demand for rubber gloves. Malaysia’s No.2 rubber glove maker Supermax has seen demand for its products jump by around a third as a flu pandemic boosts sales, its chief said. [ID:nKLR412040]
* China’s demand for natural and synthetic rubber was expected to rise 8.5 percent, or by 6.4 million tonnes, in 2010 to reflect strong growth in the country’s auto sector, the president of China’s Rubber Industry Association said on Friday. [ID:nSP449300]
* China consumes 16 percent of the world’s natural rubber.
* Underlining expectations that global tyre demand will recover, German automotive supplier Continental said it expects worldwide demand for passenger car tyres to grow 4 percent next year.
* Continental’s Passanger Tyre division head told a German magazine that it expects worldwide demand to increase to nearly 1.25 billion units next year from the 1.2 billion units it expects this year.

Source: Reuters

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