TOKYO, July 11 (Reuters) – Benchmark Tokyo rubber futures rebounded on Thursday, a day after hitting a two-week low during trading, as gains in a wide array of futures markets pushed the soft commodity higher.
But with demand for physical cargoes in Asia still muted as producing nations like Thailand carry high inventories, market watchers said it could take some time for futures prices to enter a full-fledged rally.
The benchmark rubber contract on the Tokyo Commodity Exchange (TOCOM) for December delivery rose 4.4 percent to settle at 245.1 yen per kg, a day after dropping as far 231.5 yen, its lowest since June 28.
The most-active rubber contract on the Shanghai futures exchange for January delivery rose 4.99 percent to finish at 18,000 yuan per tonne.
“The (rubber) market tracked the overnight rises in other commodities like oil, gold and silver, and stock market moves today, especially Shanghai,” said a Singapore-based industry source who declined to be identified.
Asian equities hit a near four-week high on Thursday following comments by U.S. Federal Reserve Chairman Ben Bernanke that monetary stimulus would still be needed for the foreseeable future.
China’s CSI300 index surged 4.6 percent, buoyed by a report in official media that financing rules may be partially relaxed for real estate firms.
The 19-commodity Thomson Reuters-Jefferies CRB index rose almost 1 percent on Wednesday, its biggest daily gain in nearly five weeks.
“But fundamentals are still weak, with supply seen over demand,” the Singapore-based industry source said, adding there was little movement in the physical market.
Earlier this week, small quantities of Southeast Asia rubber physical cargoes traded at multi-year lows, with the absence of top consumer China, which already holds seasonally high stocks, rattling many exporters.
The front-month rubber contract on Singapore’s SICOM exchange for August delivery last traded at 223.5 U.S. cents per kg, 3.5 percent higher.
(Reporting by James Topham; Editing by Prateek Chatterjee)
Source: Reuters
