Tokyo rubber futures edged lower on Friday due to a fall in oil prices and an increase in rubber supply from big producing countries, dealers said. The benchmark rubber contract on the Tokyo Commodity Exchange for December delivery fell 0.8 yen to settle at 364.2 yen ($4.52) per kg.
The most active Shanghai rubber contract for September delivery rose 70 yuan to finish at 31,935 yuan ($4,940) per tonne. "Actually, rising supply was already weighing on prices. However, falling oil prices encouraged players to sell contracts further," one dealer said. The heavy rain that hit top producer Thailand for weeks has stopped, allowing farmers to tap more latex, so supply is likely to rise gradually.
The International Rubber Study Group said on Friday global demand for rubber, both natural and synthetic, was forecast to rise to 25.7 million tonnes in 2011, down slightly from an estimate of 26.1 million tonnes in March but still higher than last year. TOCOM rubber was expected to rebound next week as technical sentiment remained firm after prices finished above a major support level at 360 per kg, dealers said.
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