Asian Rubber Settles Higher; Shanghai Surges On Vietnam Supply Concerns
19 May 2014, 17:53 SEAST
Asian rubber settled higher on Monday as Shanghai futures surged, amid concerns about Vietnamese rubber supply, according to traders. The continuing political tension between China and its southern neighbor saw China suspending some diplomatic contacts with Vietnam over the weekend.
Benchmark September natural rubber on the Shanghai Futures Exchange rose 5.0% before settling 3.0% higher at CNY14,275 a metric ton.
Benchmark October natural rubber on the Tokyo Commodity Exchange settled 3.3% higher at Y206.5 a kilogram with prices also getting a boost after breaching the previous Y205/kg resistance.
Meanwhile, the International Rubber Consortium sought to calm jitters about a world supply surplus this year, with Chief Executive Yium Tavarolit announcing on the organization’s website on Monday that Thai rubber farmers have filed a legal suit to halt government sales of 200,000 tons of natural rubber stockpiles.
Mr Yium added that release of the stockpiles “seems unlikely at this junction as the caretaker government does not have the authority to approve the decision.” Rubber supply is also likely to slow as farmers down tools to join a large demonstration in Bangkok this week, Mr Yium said.
October Tocom rubber closed Y0.8 lower at Y205.7/kg in the night session, which is considered part of the next trading day.