TOKYO (July 4): Benchmark Tokyo rubber futures jumped to a nearly one-month high on Monday on the back of stronger Shanghai futures and firmer oil prices, offsetting an increase in inventories in top buyer China.
The Tokyo Commodity Exchange (TOCOM) rubber contract for December delivery <0#2JRU:> finished 5.7 yen, or 3.7%, higher at 161.5 yen (US$1.57) per kg.
The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, earlier rose to as much as 161.9 yen, the highest since June 7.
“A sharp gain in Shanghai futures sparked a flurry of buying in TOCOM,” said Toshitaka Tazawa, analyst at Fujitomi Co, adding that the recent climb in rubber offer prices in top producer Thailand may have lent support to the Shanghai market.
The most-active rubber contract on the Shanghai Futures Exchange for September delivery soared 615 yuan to finish at 12,075 yuan (US$1,812.33) per tonne.
“Higher prices in oil and other commodities such as base metals also gave a lift to rubber, outweighing weak data in China,” Tazawa added.
Oil prices rose on Monday following comments from the Saudi energy minister that the market was heading towards balance, although signs of slowing demand in Asia weighed.
London copper gained for a sixth consecutive session on Monday with the market climbing to a two-month top on expectations of stimulus measures in top consumer China.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.4% from the prior Friday, the exchange said on Friday.
China’s factories flatlined in June as exports shrank and jobs were cut, a worrying trend evident across Asia that argues for yet more policy stimulus as doubts gather over the potency of measures taken so far.
“Chart looks positive now. The TOCOM is likely to try 165.8 yen hit on May 31 next,” Tazawa said.
The front-month rubber contract on Singapore’s SICOM exchange for August delivery last traded at 131.9 US cents per kg, up 2.6 cent.
(US$1 = 102.6500 yen)
(US$1 = 6.6627 Chinese yuan)