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TOKYO (May 13): Benchmark Tokyo rubber futures inched down on Wednesday as investors booked profits after it touched a 13-month high in the previous session, but higher oil prices capped losses, dealers said.
The Tokyo Commodity Exchange (TOCOM) rubber contract for October delivery <0#2JRU:> finished 0.8 yen, or 0.4 percent, lower at 223.1 yen ($1.86) per kg.
“Investors were nervous as the TOCOM prices have been at this year’s highs for a couple of days,” said Toshitaka Tazawa, analyst at Fujitomi Co.
TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, hit its highest since April 9, 2014 the previous day after breaking this year’s high of 226.7 yen hit on March 2.
“Some were afraid that the market would come under strong selling pressure while some were expecting that the market would get momentum to move higher,” Tazawa said.
Higher oil prices helped offset selling pressure from profit-taking, dealers said.
Oil extended gains on Wednesday after posting its strongest daily rise in weeks in the previous session, supported by bets that U.S. crude stockpiles will fall for a second straight week as production slows.
The most-active rubber contract on the Shanghai futures exchange for September delivery finished at 14,710 yuan ($2,370.86) per tonne, up 5 yuan. It earlier rose to as high as 14,865 yuan.
The front-month rubber contract on Singapore’s SICOM exchange for June delivery last traded at 151.0 U.S. cents per kg, down 1.7 cent.
($1 = 119.8300 yen) ($1 = 6.2045 Chinese yuan)
Source: Reuters