3 March 2014, 18:41 SEAST
Asian rubber settled little changed Monday, even with the risk aversion tied to an escalating crisis in Ukraine, because rubber production is at low levels thanks to seasonal factors.
The International Rubber Consortium, or IRCo, said rubber associations of member countries in the region, as well as Vietnam, are supporting its call not to sell the commodity at prevailing low prices.
Benchmark August natural rubber on the Tokyo Commodity Exchange settled 0.3 yen lower at Y224.7 ($2.21) a kilogram.
Concerns over China’s slowing manufacturing activity still weigh.
“Rubber had a good run in the last few years as many Chinese were using it for financing. Now that the Chinese government has clamped down on commodity financing, it looks like we’re seeing some real demand from China which is less than what we saw before,” a broker in Kuala Lumpur said.
August Tocom rubber closed Y0.3 higher at Y225.0/kg in the night session, which is considered part of the next trading day.
Physical rubber prices were also lower. “It’s a weird market with short-covering on Tocom, butShanghai rubber is falling,” said a Singapore-based dealer.
A Bangkok-based dealer at a major exporter said he had trouble even trying to acquire raw material to fulfill long-term contracts, as arrivals are just too low.
Dow Jone
