Tokyo rubber futures climbed more than 1 percent to briefly touch 333 yen on Friday, helped by firmer crude oil prices and strong physical rubber prices. Some traders warned, however, that the rubber futures market may be losing some of the upward momentum that lifted it to a 28-year high of 356.9 yen on June 30.
A Tokyo-based trader noted that funds, which have been instrumental in pushing a range of commodities to record-high levels, were keeping a low profile in the commodities market. "The mood of the market has turned a bit weak as it heads into August which is usually not a very active month," he said.
He said many traders took summer breaks in August, and were disinclined to take actives position. The key Tokyo Commodity Exchange rubber contract for December delivery was at 332 yen per kg at 0435 GMT, up 2.7 yen, or 0.8 percent, after moving between 327.1 yen and 333.0 yen.
On Thursday, the key contract touched an intraday low of 323.1 yen - the lowest for a benchmark since June 5. The front-month July contract expired at 337.2 yen, with 116 lots or 580 tonnes of deliveries. Physical rubber traders said they were starting to see more supplies in the physical market, but not enough to erase worries about a supply shortage, helping to keep prices firm.
China, the world's top rubber-consuming country, was expected to step in shortly to buy more aggressively due to falling inventories, helping to lift Asian physical prices, which in turn would help support futures prices.
Rubber latex concentrate prices softened, however, due to weaker demand from Malaysia, the world's largest producer of rubber gloves, a trader based in Thailand said. US light crude was trading around $126 a barrel on Friday after short-covering a day earlier helped stem a nearly two-week dive. Prices, however, are down significantly from the record peak above $147 set earlier this month.
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