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April 22 (Bloomberg) — Rubber tumbled to a three-week low after the Tokyo Commodity Exchange, which trades the benchmark contract, checked futures positions held by its members after the nearby month jumped to a record.
September-delivery rubber, the most-active contract, fell as much as 4.3 percent to 311.4 yen per kilogram ($3,354 a metric ton), the lowest level since April 1, and settled at 318.3 yen. The price surged 4 percent in the previous two days and reached a 21-month high of 338.5 yen April 16. April- delivery gained 1.9 percent to settle at a record 450 yen.
The exchange is asking commodity brokerage companies how many long positions they hold in contracts for delivery in April, May and June, Kazunari Hayakawa, executive managing officer for the exchange, said today in an interview. “We need to check whether any price manipulation is occurring,” he said by phone. Long positions are bets that prices will rise.
The September-delivery contract is the most active by volume and open interest.
The April-delivery position surged 37 percent this month. Speculators with short positions in April futures must buy back the contract by tomorrow, its expiry date, otherwise the raw material will need to be delivered. Short positions are bets that prices will decline.
Thai Supply
Supply from Thailand, the world’s largest producer and exporter, is expected to increase as it nears the end of a low- production season, Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co. said by phone from Bangkok.
“From now to next month, we will see more supply coming onto the market and that will pressure prices,” Navarat said. The nation is in the wintering season from February to April, when trees shed their leaves and latex output slows, diminishing supplies and driving cash prices to a record.
Auctioned price of Thai RSS-3 grade rubber fell 3.8 percent to 118.28 baht ($3.68) a kilogram, after reaching a record of 122.89 baht yesterday, according to the Rubber Institute of Thailand. Thai prices tracked falls on the Tokyo Commodity Exchange and on concerns that supply may increase after some areas resume tapping, the institution said on its website today.
The free-on-board price, excluding freight and insurance, of Thai RSS-3 grade rubber for May-delivery remained unchanged today at a record 128.05 baht ($3.98) per kilogram, the institution said.
Prices in Indonesia, the second-largest producer, jumped to the highest since 2008 this year, Rubber Association of Indonesia Chairman Asril Sutan Amir said April 16. Production in Indonesia has declined as rains disrupted tapping, he said.
September-delivery rubber on the Shanghai Futures Exchange lost 1.8 percent to settle at 24,260 yuan ($3,554) a ton.
Souce: Bloomberg