Asian Rubber Futures Rebound; Sellers Hold Back On Low Prices


24 April 2014, 17:43 SEAST


Asian rubber settled higher Thursday as a technical rebound gained traction after selling pushed prices to multiyear lows earlier this week.


Natural rubber futures on the Tokyo Commodity Exchange ended higher with the previous benchmark September contracted settling Y2.3 higher at Y203.5 a kilogram while the new benchmark October contract settled at Y203.6/kg after opening at Y203.2/kg.


Tocom is likely to test Y210/kg on a technical rebound by next week because it is oversold, Tokyo-based Okachi analyst Ryuta Imazeki said. “Prices are now below production costs,” he added.


The International Rubber Consortium was monitoring markets and will stabilize them “if and when necessary,” the three-country group’s Chief Executive Yium Tavarolit said.


Unpredictable weather is likely to underpin Tocom prices in the months ahead because of the increasing possibility of an El Nino this year, a trader in Hat Yai said. Demand for natural rubber will return because recent selling has driven prices below those of synthetic rubber, he added.


October Tocom rubber closed Y0.6 higher at Y204.2/kg in the night session which is considered part of the next trading day.


Physical rubber prices were little changed as the rebound in rubber futures stoked expectations of further gains. “There’s no raw material to buy anyway so I’m not selling,” a Bangkok-based trader who estimated natural-rubber prices were 10% below those of synthetic rubber.