TOKYO, Dec 27 (Reuters) – Key Tokyo rubber futures rose for a fourth day in a row on Thursday, clearing 300 yen in a rally helped by speculation over buying by China early next year while rubber producers have agreed to keep curbing their exports by March.
China, the world’s No. 1 rubber consumer, often buys to restock before the-week long Lunar New Year in early February. Production in the main producing countries — Thailand, Indonesia and Malaysia — also stays low during the holiday season.
Also, rubber supply usually falls in February to March as Thailand and Malaysia, the biggest and the third-biggest producers respectively, are in the dry season, when rubber trees produce less latex.
“The 300 yen looks like merely a point to pass through toward 310 yen. There is no longer fear of supply glut now that the three producing countries agreed to maintain their export curbs by March,” said Kazuhiko Saito, chief analyst at commodity brokerage Fujitomi Co.
“But the TOCOM market has been a bit overstretched in the past sessions, and people may want to take profits tomorrow before the New Year holiday starts,” he said.
The most active rubber futures contract on the Tokyo Commodity Exchange (TOCOM) for June delivery rose 4.7 yen or 1.6 percent at 300.7 yen ($3.5) per kg.
The contract rose as high as 303.1 yen, the highest for any benchmark since May 8.
Friday is the last trading day on TOCOM before trade resumes on Jan. 4. The benchmark contract has risen 16 percent this month and 14 percent this year.
The latest rally in the yen-based TOCOM rubber prices was also helped by a weaker yen. The weaker yen makes the dollar-based commodity expensive in Tokyo.
The yen fell to its lowest level in more than two years against the dollar on Thursday, reflecting expectations that the new government of Prime Minister Shinzo Abe will push to weaken Japan’s currency and implement aggressive stimulus.
The most-active rubber contract on the Shanghai futures exchange for May delivery rose 630 yuan to finish at 25,940 yuan ($4,200) per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for January delivery last traded at 296.60 U.S. cents per kg, up 2.3 cents.
($1 = 85.6700 Japanese yen)
($1 = 6.2353 Chinese yuan)
(Reporting by Risa Maeda; Editing by Sunil Nair)
Source: Reuters
