TOKYO: Tokyo’s new benchmark rubber futures edged higher on Tuesday as investors looked for bargains after the market hit the lowest since October 2016 the previous day, but lingering worries over oversupply capped gains.
The Tokyo Commodity Exchange (TOCOM) rubber contract for December delivery finished at 172.5 yen ($1.57) per kg, up 0.9 yen, or 0.5 percent, from an opening price of 171.6 yen.
The TOCOM futures, which set the tone for rubber prices in Southeast Asia, touched the lowest since Oct. 7, 2016 of 171.0 yen the previous day, amid fears for rising output and higher inventories in Asia.
“Fundamentally, the market looks weak as inventories in China is increasing while the TOCOM stocks remain high,” said Jiong Gu, an analyst at Yutaka Shoji Co.
“But the rubber prices may rebound sharply as there has been an increasing number of speculators building up short positions,” he added.
The TOCOM has fallen about 15 percent over the past month.
The most-active rubber contract on the Shanghai futures exchange for September delivery rose 5 yuan to finish at 10,485 yuan ($1,596) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for July delivery last traded at 135.3 U.S. cents per kg, down 0.9 cent.