Bellwether Tokyo rubber futures reverted to contango since Tuesday due mainly to tightening natural rubber supplies in major producing countries in Asia amid a continued weakening yen against the dollar. In contrast, Shanghai rubber futures continued falling throughout the week mainly caused by investor concern about a cash crunch in China while physical rubber markets in the region remained rangebound.
Rubber market sentiment has improved steadily after the U.S. Federal Reserve (Fed) decided on Wednesday to trim its monthly bond purchase to $75 billion from $85 billion, starting from the coming January. A weakening yen against the dollar since early October also seems to continue in the coming months. However, global stock markets are likely to remain unstable even though many latest U.S. economic data have shored up global investor confidence while China is confronting a cash crunch in the country.
Due to the current movement of rubber markets in the region and of the macro economy as mentioned earlier, rubber prices are likely to continue improving in the coming week. In addition, the dry wintering season is going to come in major rubber producing countries in the coming months.
Source: IRCo
