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Aug. 14 (Bloomberg) — Natural rubber futures declined on speculation demand may fall as prices for the commodity used to make tires reached a 10-month high.
The 14-day relative strength index for rubber futures, a gauge of momentum, has risen above 70 since yesterday, a level some investors use as an indicator that prices may drop. Rubber in Tokyo advanced as much as 2.4 percent to the highest since Oct. 8 as crude extended gains, boosting the appeal of rubber against synthetic product.
“The market was overbought,” Shuji Sugata, research manager at Mitsubishi Corp. Futures & Securities Ltd., said today. “It’s also position-squaring before the weekend.”
January-delivery rubber climbed as much as 5.0 yen to 214.0 yen a kilogram ($2,246 a ton) on the Tokyo Commodity Exchange before closing 0.4 percent lower at 208.1 yen. The most-active contract gained 8.4 percent this week.
Rubber in Tokyo has risen 53 percent this year as crude oil has gained 59 percent and car sales in China have jumped. Crude oil for September delivery added 0.3 percent to $70.72 a barrel on the New York Mercantile Exchange, gaining for a third day.
The rubber market was also underpinned by rising stock markets, fueling optimism that the global economy may rebound and demand for rubber and other commodities will increase, Sugata said.
The MSCI Asia Pacific Index gained as much as 1 percent to 114.54 before trading at 113.72 as of 3:58 p.m. in Tokyo, on course for its highest close since Sept. 25, after the Standard & Poor’s 500 Index added 0.7 percent yesterday.
Shippers in Thailand cut offers for RSS-3 grade rubber for September/October shipment to $2.04 a kilogram from $2.05 yesterday, according to Takaki Shigemoto, an analyst at broker Okachi & Co. That compared with and $1.98 on Aug. 12.
Rubber for January delivery on the Shanghai Futures Exchange, the most-active contract, fell for the first time in five days, losing 1.5 percent to settle at 19,360 yuan ($2,833). The most-active contract has jumped 79 percent this year.
Stockpiles climbed 4,780 tons to 67,558 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the exchange said today. Stockpiles are up 63 percent from 41,393 tons on June 25.
Source: Bloomberg