Asian Rubber Settles Mostly Higher After Weak Yen Provides Boost
20 August 2014, 18:12 SEAST
Asian rubber settled mostly higher Wednesday after a weak yen boosted bellwether Japan rubber above the psychological resistance level.
Benchmark January natural rubber on the Tokyo Commodity Exchange settled 0.7% higher at Y199.3 ($1.93) a kilogram as the U.S. dollar hit a four-month high against the yen.
International Rubber Consortium’s chief executive, Yium Tavarolit, said in his weekly report that natural-rubber prices were below those of synthetic rubber in the depressed market. “If the situation remains unchanged, there is a strong tendency for natural rubber production in the coming year (to) decrease significantly,” he added.
Although there were reports of falling supply due to farmers’ reluctance to produce, listed Thai major exporter Sri Trang Agro-Industry PCL said in its second-quarter results presentation that there had been “no significant reduction in supply at current low natural-rubber prices” as farmers “still need to make their living on regular tapping of rubber.”
January Tocom rubber closed Y2.6 higher at Y201.9/kg in the night session, which is considered part of the next trading day.
Physical rubber prices were mostly higher, although purchasing activity from China was slow as buyers digested stocks in Qingdao. Sri Trang said a decline in Qingdao warehouse stocks and a new policy to limit natural-rubber stockpiles at the port might point to improved propects for the market.