TOKYO (Jan 11): Benchmark Tokyo rubber futures surged to a near 4-year high on Wednesday on concerns widespread flooding in southern Thailand, the world’s biggest rubber producer, would affect supply, dealers said.
Flash floods in southern Thailand washed out a bridge on the country’s main north-south highway on Tuesday, backing up traffic for 200 km (125 miles) as the death toll from days of unseasonable rain rose to 25, media reported. The wet weather has also hit a main rubber-producing area.
The floods however should not have as long-lasting an impact on the country’s economy as the one in 2011, Bank of Thailand Governor Veerathai Santiprabhob said on Tuesday.
The Tokyo Commodity Exchange (TOCOM) rubber contract for June delivery finished 11.5 yen, or 4.1%, higher at 290.9 yen (US$2.51) per kg. It rose as high as 292.0 yen earlier in the session, surpassing December’s highs and hitting the highest since May 23, 2013.
“The market certainly got a boost from the flooding news, but Japanese speculators’ buys may have also contributed to the sharp gain in Tokyo,” said Jiong Gu, an analyst at Yutaka Shoji Co.
“I hear the flooding may delay shipments or deliveries for a while, but actual production may not be affected so much,” he said.
The most-active rubber contract on the Shanghai futures exchange for May delivery rose 500 yuan to finish at 19,555 yuan (US$2,822.97) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for February delivery last traded at 210.8 US cents per kg, up 2.1 US cent.
(US$1 = 115.9900 yen)
(US$1 = 6.9271 Chinese yuan)
