Tokyo rubber rebounds on supply concerns

Print this page Posted on : 07-28-2008 by recycleinme.com

Tokyo rubber futures rebounded nearly 1 per cent on Thursday on short-covering reflecting a recovery in oil prices and solid Asian physical rubber prices after falling to a seven-week low in the morning. ''Rubber recovered in line with other commodities on short-covering. We've also seen a strong recovery in oil,'' said Mr Shuji Sugata, manager at Mitsubishi Corp Futures and Securities. ''Sentiment remains weak, but falls in rubber have been limited compared with other industrial commodities, such as platinum, so we were expecting to see some short-covering.''

The key Tokyo Commodity Exchange rubber contract for December delivery closed at ¥329.3 per kg, up ¥2.9 or 0.9 per cent. It briefly touched an intraday low of ¥323.1-the lowest for a benchmark since June 5. The key contract may stay under downward pressure after it failed to finish above the five-day moving average of ¥329.7.

Asian physical prices have stayed supported due to tight supply conditions in the world's top producer Thailand, with sellers refraining to lower prices as they expect Chinese buyers to step in the market soon. "China is coming into the market to buy from prompt shipments because they are running short,'' a trader in Thailand.

Source : Business Line