Thai rubber futures ended higher on Tuesday as oil prices held near historic highs and investors believed demand will shift to natural rubber from the synthetic variety made from petrochemical products, brokers said.
Overall volume barely changed as 109 contracts of ribbed smoked sheet number three (RSS3) were traded compared to 110 on Monday. The most active April contract finished at 52.0 baht per kg, it's highest since July, up from 51.8 baht per kg on Monday.
The number of contracts traded fell to 39 from 46. The January contract ended at 52.2 baht per kg with 12 contracts traded, up from 51.6 baht on Tuesday when 7 contracts changed hands.
"Players bought contracts as they expect prices to rise further," said one broker. Brokers said tyre makers would shift to natural rubber from synthetic rubber due to high oil prices.
"Fundamentally, high oil prices could further boost demand for natural rubber," another broker said.
Tyre makers can use either natural rubber or synthetic rubber derived from petrochemical feedstock's depending on prices. Synthetic rubber was around $1.50 per kg on Tuesday while Thai RSS3 natural rubber sheet was $1.25-1.26 per kg.
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