Tokyo rubber recovers on short-covering
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Tokyo rubber futures rose modestly on Thursday on short-covering after prices fell near to a psychological level of ¥200, but weaker oil prices limited the rises. The benchmark Tokyo Commodity Exchange rubber contract for March delivery rose ¥1.5, or 0.7 per cent, to settle at ¥206.9 ($2.05) per kg.
On Wednesday the March contract fell by the daily ¥16 limit to close at ¥205.4, the lowest for any benchmark since December 2006. But the bounce could be technical, given uncertainty over demand for auto tyres, which are made from natural and synthetic rubber, traders said.
Weaker oil prices usually encourage the use of natural rubber as it makes synthetic rubber, a petrochemical product, expensive. Physical rubber prices rose slightly on Thursday, tracking gains on TOCOM, but traders said the market outlook was still weak, weighed down by fears over falling demand amid the global financial crisis.
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Source : Business Line |
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