Tokyo rubber drops tracking energy prices

Print this page Posted on : 02-23-2008 by recycleinme.com

Tokyo rubber futures closed down on Friday, tracking a decline in energy prices, but the market drew some support from worries about supplies from top Asian producers such as Thailand.

Rounds of bargain-hunting lifted rubber to as high as 321.3 yen, but the buying later ran out of steam as traders were reluctant to add to long positions ahead of the weekend.

''Oil prices are mainly driving prices for rubber, but in general funds are shifting into rubber from other commodities due to expected production falls in Thailand,'' said Mr Hisaaki Tasaka, market analyst at Ace Koeki in Tokyo.

''Rubber may pick up momentum should it break above the 2006 high,'' Tasaka said. Rubber futures rose on Wednesday to 321.7 yen-the highest for a benchmark since June 2006 when it hit 324.5 yen.

Investors locked in profits on Friday as the yen strengthened and as the key July contract had trouble overcoming chart resistance at that 2006 peak.

Through Thursday's close open interest had risen more than 20 per cent this week to 49,479 contracts, the highest since mid-August and an indication of mounting long positions

Source : Business Line