TOKYO, May 24 (Reuters) – Benchmark Tokyo rubber futures closed slightly higher in thin trade on Tuesday, bouncing back from a three-month low touched earlier in the session, as investors covered short positions after prices fell sharply in the past month, dealers said. Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, have lost more than 20 percent since an April high of 205.1 yen, weighed down by fears over weak demand in top buyer China. “Investors stepped up covering short positions since prices have plunged so fast over the past month,” said a Tokyo-based dealer.
The TOCOM rubber contract for October delivery JRUc6 0#2JRU: finished 0.5 yen, or 0.3 percent, higher at 156.3 yen ($1.43) per kg. Earlier in the day, it touched the previous session’s low of 154.3 yen, the lowest since Feb.29.
“The recent drop in Tokyo seems to have reflected a slide in Shanghai futures which have been tracing prices in coal and iron ore in China, rather than rubber’s own fundamentals,” the dealer added. The most-active rubber contract on the Shanghai futures exchange for September delivery SNRcv1 fell 170 yuan to finish at 10,330 yuan ($1,575.70) per tonne. “We expect the TOCOM benchmark to head back to 180 yen in the near term as the market has been oversold, mainly led by speculators’ selling,” the dealer said.
The front-month rubber contract on Singapore’s SICOM exchange for June delivery STFc1 last traded at 124.5 U.S. cents per kg, up 1.1 cents.
($1 = 109.4000 yen)
($1 = 6.5558 Chinese yuan)
(Reporting by Yuka Obayashi; Editing by Subhranshu Sahu)
