This entry was posted on Wednesday, September 15th, 2010 at 7:11 pm 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.
Rubber dropped for the first time in three days after crude oil fell and on speculation that supplies from Thailand improved, cutting the appeal of the commodity used to make tires.
Futures dropped as much as 0.9 percent after oil extended a fall on an industry report that showed U.S. crude stockpiles rose. Rubber’s decline came even after Japan’s government intervened in the foreign-exchange market, selling yen. A weaker Japanese currency typically boosts yen-denominated futures.
“Falling crude oil prices were a major factor pressuring the rubber market,” Varut Rungkhum, an analyst at commodity broker Agro Wealth Ltd., said by phone from Bangkok
February-delivery rubber settled at 295.9 yen per kilogram ($3,526 a metric ton) after advancing to four-day high of 298 yen. The contract has advanced about 7.2 percent this year. March-delivery rubber on the Shanghai Futures Exchange fell 1.4 percent to close at 25,285 yuan ($3,752) a ton.
A reduction in rainfall in Thailand eased concerns over the supply situation, said Chaiwat Muenmee, an analyst at Bangkok- based commodity broker DS Futures Co. Tokyo’s intervention to weaken the yen helped limit rubber’s losses, Chaiwat said.
Japan’s Finance Minister Yoshihiko Noda confirmed that the country acted to stem a rally in the yen that threatened to stunt the nation’s export-led economic recovery. It was the first intervention in the currency market since 2004.
The yen was at 85.44 to the dollar after earlier trading at 82.88, the highest level since May 1995. Bank of Japan Governor Masaaki Shirakawa said that he hoped the intervention will stabilize the foreign-exchange market.
Source: Bloomberg