TOKYO May 26 (Reuters) – Benchmark Tokyo rubber futures rose on bargain hunting on Thursday after a steep slide over the past month and as stronger Shanghai futures and higher oil prices weighed, dealers said.
The new Tokyo Commodity Exchange (TOCOM) rubber contract for November delivery <0#2JRU:> finished at 159.4 yen ($1.45) per kg, up 2.8 yen, or 1.8 percent, from an opening price of 156.6 yen.
“Investors unwound short positions as the market has fallen deeply and quickly since hitting a high in April,” said Jiong Gu, an analyst at Yutaka Shoji Co.
The 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 concerns over weak demand in top buyer China.
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“Stronger Shanghai futures also lent support,” Gu added.
The most-active rubber contract on the Shanghai Futures Exchange for September delivery rose 280 yuan to finish at 10,600 yuan ($1,616.40) per tonne.
Also on the positive side, Brent oil futures climbed above $50 a barrel on Thursday for the first time in nearly seven months on signs that a global supply glut is easing, a week ahead of an OPEC meeting.
“The TOCOM market may see a rebound for a short while, but the overall trend is expected to remain weak due to fears over slow demand in China,” Gu said.
The front-month rubber contract on Singapore’s SICOM exchange for June delivery last traded at 128.5 U.S. cents per kg, up 2.7 cents.
($1 = 109.9500 yen)
($1 = 6.5578 Chine
