Tokyo rubber futures rose further on Thursday, hitting a five-month high on the back of tight supply in producing countries, but the gains were limited by the strength of the Japanese yen, dealers said. The benchmark rubber contract on the Tokyo Commodity Exchange for March delivery rose 2.6 yen to settle at 324.3 yen ($3.91) per kg. It rose at one stage to 324.5 yen, the highest since late April.
"Concern over falling supply supported TOCOM prices, but that was not strong enough to offset heavy stop-loss selling in the afternoon session when the yen kept rising," one dealer said. TOCOM prices were expected to rise gradually on Friday as technical sentiment had improved while limited supply should continue to provide support. However, the rise was again expected to be capped by the strong yen, dealers said. The global rubber market could see two years of tight supplies and rising prices as output sputters while producers replace ageing trees and as demand increases.
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