TOKYO: Benchmark Tokyo rubber futures edged higher on Wednesday, while those in Shanghai gained nearly 1 percent, a day after China said it would raise the cap on rubber import tariffs, dealers said.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, have been moving in a narrow range of around 202 yen of late, and are down 26 percent this year, due to excess supplies and weak demand.
Shanghai futures found support after China on Tuesday said it would lift the cap for rubber import tariffs, a revision that may dent imports from Thailand but also hurt domestic tire makers.
Analysts said the move was likely aimed at supporting local farmers.
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“I think the move is aimed at protecting domestic firms, and it provided some support to Shanghai futures,” said a Tokyo-based broker.
The Tokyo Commodity Exchange rubber contract for May delivery finished 0.5 yen higher at 202.3 yen ($2) per kg, after hitting a one-week high of 205 yen earlier.
The most-active rubber contract on the Shanghai futures exchange for May delivery rose 105 yuan to finish at 12,440 yuan per tonne, after jumping more than 3 percent in early trade.
But the gains were modest amid the risk of financial contagion spreading from Russia where an emergency hike in interest rates failed to stop the rouble’s descent to new lows.
The rouble plunged more than 11 percent against the dollar on Tuesday in its steepest intraday fall since the Russian financial crisis in 1998 as confidence in the central bank evaporated after an ineffective rate hike.
The U.S. dollar stood around 117.20 yen in late afternoon, little changed from a day earlier.
The front-month rubber contract on Singapore’s SICOM exchange for January delivery last traded at 147.80 U.S. cents per kg, down 0.7 cent.
– Reuters
