* Inventory in Shanghai falls, but Qingdao stocks rise
* TOCOM rubber faces tough resistance at 209 yen/kg (Adds closing prices, SICOM)
SINGAPORE, May 19 (Reuters) – Asian rubber futures rallied 5percent on Monday after inventories in Shanghai fell to theirlowest level since December and oil prices firmed, but worriesabout China’s economy could limit gains.
The most active rubber contract on the Shanghai FuturesExchange for September delivery rose 5 percent to endat 14,550 yuan a tonne, its strongest since late April. Tokyofutures tracked Shanghai higher and rose more than 4 percent.
Inventories in warehouses monitored by the Shanghai FuturesExchange dipped 2.2 percent week-on-week to their lowest levelsince December at 163,097 tonnes (SNR-TOTAL-DW). However, stocksin Qingdao are estimated to have increased to around 362,000tonnes from around 360,000 tonnes last week and 290,000 tonnesin January.
The high inventory in Qingdao could make it tough for Tokyofutures, which set the tone for global prices, to breach keyresistance levels at 209-210 yen a kg. The Tokyo market has fallen about 25 percent this year on concerns over economicgrowth in China.
“The stocks in Qingdao are very high. I think for this week,210 yen will be the key resistance,” said an analyst in Tokyo.
The most active October rubber contract on the TokyoCommodity Exchange hit a high of 208.4 yen a kg, its strongestsince late April, and settled 6.5 yen higher at 206.5 yen.
“Maybe the price will still be supported at 200 yen. Whenthe price gets over 209 yen, it may touch 220. But, it stillneeds strong news, such as bad weather,” said Gu Jiong, ananalyst at Yutaka Shoji Co in Tokyo.
“Without that, it will be kept in a narrow range. AlthoughShanghai (inventory) is falling, there’s still plenty of stocksin Qingdao,” said Gu.
The front-month rubber contract on Singapore’s SICOMexchange for June delivery was last traded at 171.50U.S. cents a kg, up 2.40 cents.
Growth in average new home prices in China slowed to a nearone-year low in April, data showed on Sunday, adding to concernsabout the weakness of the property market and what policymakerscan do if prices start to fall too sharply.
Brent crude rose to $110 a barrel on Monday on renewedconcerns over Libya’s oil output and following some of the worstviolence in Tripoli since the 2011 war against Muammar Gaddafi. (Reporting by Lewa Pardomuan and Osamu Tsukimori; Editing byRichard Pullin and Anand Basu)
– Reuters
