Tokyo rubber drops 1% on profit booking
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Tokyo rubber futures fell 1 per cent on Friday, with investors taking profit after oil came off its record highs and after the market hit a 16-month high earlier in the week.
The benchmark rubber contract on the Tokyo Commodity Exchange for April delivery fell 3.0 yen, or 1 per cent, to settle at 304.6 yen ($2.71) per kg. It rose to 312.2 yen on Wednesday, the highest since July 2006, up 34 per cent from this year’s low of 232.5 yen marked in August, on the back of soaring crude oil prices.
The rubber market often looks to crude oil prices for direction as expensive oil makes synthetic rubber, a petroleum product, more costly, leading to a shift to natural rubber. But TOCOM rubber was expected to take a breather.
On the physical front, rubber prices were mostly unchanged despite falls of futures contract prices on TOCOM.
Physical trade revived with Singapore and Malaysia back from a holiday, but high prices still kept most buyers on the sidelines, traders said.
China bought Indonesian SIR 20 for December and January shipment as it was cheaper than Thai STR20 and Malaysia MSR20, traders said.
Tyremakers bought Thai RSS 3 at $2.55 per kg for February shipment, they said. Physical prices were likely to remain high next week due to scattered rain across Thailand’s south, which produces around 90 per cent of the country’s annual production of 3 million tonnes.
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Source : Business Line |
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