TOKYO: Key Tokyo rubber futures edged higher on Tuesday in their first rise in eight sessions, helped by a recovery in stock markets, but persistent concerns about unrest in Libya and the surrounding region weighed on prices.
FUNDAMENTALS
The benchmark rubber contract on the Tokyo Commodity Exchange for August delivery was up 7.3 yen or 1.6 percent at 473.7 yen as of 0037 GMT.
The benchmark contract ended the month nearly flat on Monday, after the previous benchmark contract for July delivery hit a record high of 535.7 yen in mid-February.
The most active Shanghai rubber contract for May delivery rose 1,030 yuan or 2.7 percent to close at 39,315 yuan ($5,979) per tonne on Monday.
The dollar struggled to regain its footing in Asia on Tuesday after a steep decline, while the euro held firm as investors bet the Federal Reserve will stick to its easing course even as the ECB talks of tightening.
Brent crude rose more than $2 a barrel on Monday as concern persisted about security of supply from the Middle East and North Africa even after top exporter Saudi Arabia boosted supply to meet the shortfall caused by a cut in exports from Libya.
Global natural rubber output will rise nearly 5 percent in 2011, a senior economist of the ANRPC grouping of rubber producing nations said on Monday, lower than 8 percent targeted by their governments, as record prices take their toll on yields.
Japan's crude rubber inventories rose 2.1 percent from Jan. 31 to Feb. 10, to their highest level since July 2009, Rubber Trade Association of Japan data showed on Monday.
MARKET NEWS
Commodity investors remained concerned about protests in the Middle East on Monday but Saudi Arabia's reassurance that it would pump more oil unwound gains in crude and gold, while US cocoa futures rocketed to a 32-year peak after gun battles erupted in Ivory Coast.
US stock index futures were mostly flat on Monday on continued concerns that unrest in Libya could spread through the region, though stable oil prices prevented further losses.
Japan's Nikkei average edged up on Tuesday encouraged by gains on Wall Street, but it may stay in a narrow range due to uncertainty about oil prices as investors worry about developments in the Middle East.
The average price US drivers paid for gasoline soared 19.4 cents in the latest week to $3.38 a gallon, the biggest jump in pump prices since Hurricane Katrina disrupted petroleum supplies in September 2005, the Energy Department said on Monday.
Nippon Steel Corp, the world's No.4 steelmaker, said it is seeking a roughly 25 percent price hike after April to cover surging input costs but fierce resistance is likely from key domestic customers such as Toyota Motor which face sluggish demand at home.
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