Key Tokyo rubber futures jumped 3.2 percent on Monday pulled higher by a robust Shanghai market as well as rises in oil and share prices, but many expect a fall back as uncertainty about the debt crisis in Europe caps any upside. The key Tokyo Commodity Exchange rubber contract for March delivery settled up 12.9 yen at 291.5 yen per kg. It earlier rose as high as 295.5 yen, up 4.7 percent.
Shanghai rubber futures climbed, with the most active January contract hitting its limit-up at 26,465 yuan a tonne. The contract closed up 6.4 percent at 26,320 yuan per tonne, with volume expanding to 1,634,484 lots. "Share rallies and the strong Shanghai market lent support, helping TOCOM rebound from Friday's low of 275.2 yen, while investors were also conscious of Thailand's measures to prop up rubber prices," said Naoki Asami, a chief broker at trading house Kanetsu. "But as there's no silver-lining on the global economic horizon, the benchmark contract could fall and stay within the range of 280 yen to 300 yen for a while," he said.
Many expect Thailand's worst flooding in five decades to have little impact on rubber supply, with many factories, plantations and trading houses located in the south, which has not been impacted by the deluge. Thailand is the world's largest rubber producer. Asami said a shortage of demand is more of a concern because many carmakers have halted production in the country.
Comments
Comments are closed.