Tokyo rubber futures end higher

Key TOCOM rubber futures rose on Monday, tracking higher oil prices and firm equity markets, but gains were capped as investors fretted about the European debt crisis, rubber demand and the possibility of a further rise in the yen. The key Tokyo Commodity Exchange rubber contract for November delivery, which debuted on Monday, settled at 270.3 yen, after opening at 267.8 yen. The previous benchmark October contract settled up 1.3 percent at 270.5 yen.
"Investors are cautious due to lingering concerns over the European debt crisis and possible future ascent of the yen," said Naoki Asami, chief broker at trading house Kanetsu. "There are many who want to sell, but the Thai government's plan to import rubber made them cautious and take a wait-and-see stance." Thailand, the world's biggest rubber producer and exporter, said last week it would import rubber to honour overseas contracts after rain reduced supplies, a rare move that lifted Tokyo futures off four-month lows and boosted Asian tyre grade prices. The most active Shanghai rubber contract for September delivery closed at 24,465 yuan per tonne on Monday, up from Friday's closing price of 24,270 yuan.
The front-month June rubber contract on the SICOM in Singapore was last traded at 321 US cents per kg, down 0.4 cents. Risk aversion eased across financial markets on Monday, with Asian shares edging up and the euro bouncing off two-year lows as Greek opinion polls showing rising support for pro-bailout parties calmed speculation of a disorderly exit by Athens from the single currency. Brent crude edged above $107 per barrel, supported by the Greek opinion polls and supply worries triggered by the lack of progress in talks over Iran's nuclear programme.
The rubber market was also buoyed by news that China would soon resume paying subsidies to rural residents who trade in old vehicles for new, fuel efficient ones in an effort to rekindle demand amid a slowdown in the world's largest auto market. China is the world's top rubber consumer. The combined profits of industrial companies across China fell 1.6 percent in the first four months of 2012 from a year earlier to 1.45 trillion yuan ($228.6 billion), the National Bureau of Statistics said on Sunday.