TOKYO: Benchmark Tokyo rubber futures ended up 0.3 percent on Monday, marking their first gain in three days, helped by the rebound in Shanghai futures and a weaker yen, though dealers said market fundamentals remained weak amid slowing demand in top consumer China.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, were down for most of the day, though they have recovered more than 20 percent since hitting their lowest in more than five years in October last year.
The Tokyo Commodity Exchange rubber contract for August delivery finished 0.7 yen higher at 210.6 yen per kg, after earlier declining to as low as 206.6, the lowest since Feb. 6.
“The first few months of TOCOM contracts declined, a sign that the overall market was weak,” said a source with a Tokyo-based dealer. “The market is weak though some areas are experiencing wintering and physical shipments were tight. The market may see some further decline in coming days.”
Wintering is a period that occurs every year when rubber trees become drier, resulting in lower yields.
The market outlook was bearish after the Association of Natural Rubber Producing Countries said last week that China’s rubber imports will likely drop to 3.7 million tonnes in 2015, down nearly 10 percent from the year before, marking the first decline in at least a decade.
The U.S. dollar was quoted around 120.95 yen, compared with around 120.21 on Friday afternoon.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 5.1 percent from Feb. 27, the bourse said on Friday.
The most-active rubber contract on the Shanghai futures exchange for September delivery rose 35 yuan to finish at 12,815 yuan per tonne.
The front-month rubber contract on Singapore’s SICOM exchange for April delivery last traded at 141.30 U.S. cents per kg, up 0.8 cent.
– Reuters
