This entry was posted on Wednesday, August 5th, 2009 at 8:36 am and is filed under Rubber News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
TOKYO, Aug 4 (Reuters) – Tokyo rubber futures rose to a nine-month high above 200 yen on Tuesday on renewed hopes for rubber demand amid improving expectations for economic recovery, but prices were capped as investors grew wary of fast-paced gains.
* The key Tokyo Commodity Exchange rubber contract for January 2010 delivery <0#JRU:> gained as much as 3.4 percent to 202.9 yen per kg, the highest for a benchmark since Nov. 5. It settled up 0.6 yen or 0.3 percent at 196.9 yen.
* The benchmark contract’s rise accelerated after it broke above resistance at 180 yen in late July, rising 13 percent in little more than a week. The lead contract is up nearly 60 percent from the year’s low of 127.8 yen hit on March 3.
* Rubber’s jump reflected strong gains in crude oil earlier in the day when London’s Brent crude futures rose more than $2 to near $74 a barrel, their highest this year.
* But later in the day, U.S. crude fell $1 to below $71, giving up some of the previous day’s 3 percent gain amid worries about a rise in U.S. crude inventories. [O/R]
* Rubber began to ease from the day’s highs before oil’s fall. “Rubber was the first to drop, before oil, indicating that investors became wary of the fast pace of recent gains after achieving their near-term 200-yen target,” said a senior dealer at a Japanese trading firm.
* “A sense of expensiveness of rubber relative to other commodities also prompted investors to take profits,” he said.
* If the market fails to keep gains above 200 yen in coming days, then a correction could push the market down to just below 190 yen where prices may stabilise, he said.
* Tokyo rubber futures, which set the tone for physical prices, may slip in August as players book profits from the current rally, but demand from tyre makers in China could cushion the fall, a Reuters poll showed on Monday. [ID:nBKK528380]
* Physical rubber supplies show signs of returning to the market after heavy rains in Thailand and Malaysia and the dry wintering season in Indonesia caused availability to fall, some traders said.
* Tyre rubber grades from West Africa found buyers in Malaysia and a few cargoes were being offered to China, while prices of rubber jumped in Southeast Asia on high futures and tight supplies, dealers said on Monday.
Source: Reuters