TOKYO — Natural rubber futures are gaining here on price-supporting measures by producing countries, with the August contract for a benchmark product trading at a seven-month high on the Tokyo Commodity Exchange.
The most-actively traded August contract for Ribbed Smoke Sheet No. 3 gained 2% Monday to 179.3 yen ($1.58) per kilogram, some 22% higher than the recent low in early February.
The Indonesian government announced last week that it will buy 500,000 tons of natural rubber. It did not specify the timing, but is expected to mix the material with asphalt to build roads in the country. Indonesia, the world’s second-largest producer, plans along with Thailand and Malaysia to cut total exports by 615,000 tons over the six months starting in March.
Prices are also climbing because many producing countries are entering the dry season. Output is expected to drop about 20% from March to about May, and some say the continued drought from last year could further crimp output. The price of crude oil, which is used to make synthetic rubber, is on the rise as well.
“There are many encouraging factors,” said Hideshi Matsunaga of Sunward Trading. “The large-scale [government] measures can push prices up even further.”
(Nikkei)
