Tokyo rubber futures rose 4 percent on Friday as a rally in equities and oil markets eased concerns about demand. Futures prices have been caught in a range between 125 and 145 yen recently as global automakers slash production, resulting in slackening tyre demand, while producers have resisted cutting prices below $1.35 per tonne as agreed late last year.
The key Tokyo Commodity Exchange rubber contract for August delivery ended the morning session at 138.9 yen per kg, up 5.4 yen from the previous close. Oil fell but stayed above $46 a barrel ahead of a weekend Opec meeting which pushed up prices up by more than 11 percent, helped by better-than-expected US February retail sales data. "The market goes up and down, depending on external factors, such as oil and currencies.
Its own fundamentals are now mostly taken for granted," said a manager at a Tokyo trading firm. "Speculative activity could test either the upside or downside of the recent price range. A driver would be technical charts, not fundamentals," he said. The worlds top three rubber producing countries, which have agreed to reduce exports this year, are set to meet the Chinese rubber association on March 17 in Guangzhou, China, to look for ways to cooperate to stabilise prices and avoid defaults.
But traders said expectations for the meeting were low as Indonesia, the No 2 producer, failed to meet, the top three rubber producers agreement late last year not to sell rubber below $1.35 per kg, or $0.60-0.61 per pound. Tokyos Nikkei share average jumped more than 5 percent on Friday following the lead of Wall Street, which rose thanks to stabilising retail sales and after Bank of America reported a return to profit.
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