Asian Rubber Settles Higher; Tight Supply Lifts Spot Prices
22 January 2015, 18:22 SEAST
Asian rubber settled higher on Thursday due to tight raw material supply and support from renewed efforts by the Thai government to shore up prices.
Benchmark June natural rubber on the Tokyo Commodity Exchange settled Y5.5 higher at Y201.4 ($1.7) a kilogram, with prices also getting a boost after breaching the psychological Y200/kg barrier.
However, a Bangkok-based trader said sluggish demand and overall market sentiment did not support further gains, so investors were likely to lock in quick profits.
International Rubber Consortium chief executive Yium Tavarolit said in a note that rubber prices will be more influenced by external factors due to macroeconomic uncertainty and weak investor confidence.
June Tocom rubber closed Y2.4 lower at Y199.0/kg in the night session, which is considered part of the next trading day.
Benchmark May natural rubber on the Shanghai Futures Exchange settled 3.3% higher.
Spot rubber prices were higher than those on the Singapore Exchange due to supply constraints with production having slowed after last year’s price slump. Rubber prices on the SGX are the benchmark for the physical rubber trade.
Meanwhile, Thailand’s government has agreed to help increase rubber prices following calls from local farmers who have been hit hard by falling commodity prices. The decision was made after Deputy Prime Minister and Defense Minister Gen. Prawit Wongsuwan met with representatives from major rubber business operators on Wednesday.