TOKYO (June 24): Benchmark Tokyo rubber futures snapped a five-session rally to head lower on Tuesday, pulling back from a more than two-month high in the previous day, as profit-taking and a decline in crude oil market pressured prices.
The benchmark rubber contract on the Tokyo Commodity Exchange (TOCOM) for November delivery dropped 1.3 yen, or 0.6 percent, to settle at 217.0 yen ($2.13) per kg.
But the front-month contract for June delivery, which expired on Tuesday, rose 2.1 yen to end at 206.1 yen, helped in part by buys from producers, dealers said.
“The benchmark contract came under pressure as investors took profit to secure short-term gains,” Jiong Gu, analyst at Yutaka Shoji Co, said.
Softer crude oil prices were also behind the weak market tone, according to dealers.
Brent crude slipped below $114 a barrel on Tuesday, as data showing near-record high oil exports from Iraq indicated supplies remained unaffected by the escalating violence at OPEC’s No. 2 producer.
The news from Thailand, the world’s biggest rubber producer, that its government aims to raise local rubber consumption to support prices did not help rubber prices turn around.
The Thai military government plans to shore up falling rubber prices by increasing domestic consumption instead of intervening in the market via a costly buying scheme, a senior government official said on Tuesday.
“It’s not real yet. The government needs to come up with specific plans to boost consumption as well as to use the 200,000 tonnes of rubber stocks in state warehouses in order to support rubber prices,” Yutaka Shoji’s Gu said.
The most-active rubber contract on the Shanghai futures exchange for September delivery rose 30 yuan to finish at 15,285 yuan ($2,500) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for July delivery last traded at 179.30 U.S. cents per kg, down 0.2 cents.
($1 = 102.0500 Japanese Yen)
($1 = 6.2090 Chinese Yuan Renminbi)
– Reuters
