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Rubber advanced to the highest level in more than two weeks on speculation that demand may climb as Asian equity markets gained and the Japanese currency declined.
Futures climbed as much as 2.8 percent to 270.8 yen per kilogram ($3,082 a metric ton), the highest level since July 12, as the MSCI Asia Pacific Index rose for a fourth day on optimism that corporate earnings may improve.
“Rallies across the Asian markets spilled over to commodities, including rubber,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co.
January-delivery rubber settled at 268.6 yen per kilogram on the Tokyo Commodity Exchange. November-delivery rubber on the Shanghai Futures Exchange rose 3.1 percent to 22,875 yuan ($3,374) a ton.
“A weaker yen supported the rubber market,” Kazunori Kokubo, general manager of the international business department at commodity broker Yutaka Shoji Co., said by phone from Tokyo.
The currency weakened to 88.08 against the dollar from 87.90 yesterday, making the yen-denominated rubber contract more attractive for holders of other currencies.
Prices also climbed on speculation that low stockpile levels in China and Japan may prompt buyers to replenish inventories, Kokubo said.
Short Positions
“Warehouse stock in Japan is still very low and investors who hold short positions are worried about higher prices, prompting them to cover,” Kokubo said, referring to bets that prices would fall.
Data from the Tokyo exchange showed last week that natural- rubber stockpiles monitored by the bourse dropped 29 percent to 1,341 tons as of July 10. That’s the lowest level since at least 2001, according to exchange spokesman Seiki Ichimura.
Natural-rubber stockpiles in China decreased 2,046 tons to 19,328 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said on July 23.
Cash prices advanced, tracking gains on the Tokyo market, and as heavy rains in southern Thailand may limit supply, the Rubber Research Institute of Thailand said on its website today. The price added 0.2 percent to 102.40 baht ($3.18) per kilogram.
Source: Bloomberg