Rubber futures rallied in Asia on Friday, with the global benchmark in Tokyo posting its biggest weekly gain since January on hopes the US Federal Reserve's new economic stimulus would support growth and boost raw material demand. The most active rubber contract on the Tokyo Commodity Exchange (TOCOM), currently February 2013, rose as high as 255.6 yen per kg, moving away from a 3-year low struck in mid-August, before settling 13 yen higher at 254.6 yen.
But Tokyo futures were still well below a lifetime high of 535.7 yen hit in February last year. Prices have been weighed down by worries the debt crisis in Europe and a slowdown in China could curb demand for rubber. Weaker Tokyo futures had also decreased the price of tyre grades in Southeast Asia, prompting Thailand to launch a 15 billion baht ($486 million) scheme in early 2012 to buy rubber from farmers. Key Shanghai rubber futures rose by their daily limit to 24,675 yuan per tonne in early trade and settled at 24,370 yuan, compared with 23,080 yuan at Thursday's close. The front-month October rubber contract on Singapore's SICOM exchange was last traded at 285 US cents a kg, up 12.20 cents.
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