SINGAPORE, May 20 (Reuters) – Tokyo rubber futures could trade in a wide range this week, with bulging inventory in top consumer China holding prices below 300 yen.
Rubber inventory in Shanghai fell 0.8 percent to 120,160 tonnes last week, but the stockpiles are still within sight of their highest level in more than three years after import tax cuts boosted purchases.
The most active rubber contracts on the Tokyo Commodity Exchange, October, hit a high of 292.50 yen a kg, before easing slightly to 290.1 yen, as the Japanese currency bounced from 4-1/2 year lows. The contract last touched 300 yen in March.
“I think the market may form double tops. If it can get over 299 yen and touch 300 yen, it may get higher. But there’s just a very low possibility,” said Gu Jiong, an analyst at Yutaka Shoji Co in Tokyo. “I think it is still in the 270 to 300 yen range.”
Tokyo rubber futures, which set the tone for physical prices, hit a lifetime high at 535.7 yen a kg in February 2011 as speculators bet on future supply shortages. The contract, however, is often driven by movements of the yen and equities.
Source: Reuters
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