TOKYO (April 13): Benchmark Tokyo rubber futures rallied to a fresh eight-month high on Wednesday, extending gains into a third session, backed by an overnight gain in oil prices, and as upbeat China’s trade data fuelled hopes of a demand pick-up in the world’s top buyer.
The Tokyo Commodity Exchange(TOCOM) rubber contract for September delivery <0#2JRU:> finished higher by 4.3 yen, or 2.3%, at 193.3 yen (US$1.78) per kg, after touching a high of 197.0 yen, the highest since Aug 11, 2015.
The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, have surged more than 9% so far this week, also helped by speculations that rubber output in Southeast Asia may be affected by bad weather.
With hopes of a production cap agreed by top producers Russia and Saudi Arabia back in play, global oil prices climbed to four-month high overnight. However, they fell around 2% in Asian trade on Wednesday after Saudi’s oil minister Ali al-Naimi appeared to rule out a cut in crude production.
China’s exports in March jumped 11.5% and returned to growth for the first time in nine months, adding to further signs of stabilisation in the world’s second-largest economy that cheered regional investors.
Stocks in Shanghai jumped more than 1% to a three-month high on Wednesday while the most-active rubber contract on the Shanghai futures exchange for September delivery rose 300 yuan to finish at 12,525 yuan (US$1,936.76) per tonne after hitting a high of 12,950 yuan, the highest since last July.
“It seems buys from Chinese funds were behind the recent gains in Shanghai futures, which also led the way to TOCOM’s rally,” a Tokyo-based dealer said.
“In terms of fundamental, rubber prices have been overbought,” he said, predicting to see position adjustments in the coming days.
The front-month rubber contract on Singapore’s SICOM exchange for May delivery last traded at 151.0 US cents per kg, unchanged from the previous session.
(US$1 = 6.4670 Chinese yuan renminbi)
(US$1 = 108.9000 yen)
