Tokyo rubber futures rose to a new record high on Wednesday on speculative buying backed by tight supply in producing countries, but China's move to curb inflation prevented prices from rising sharply further. The benchmark rubber contract on the Tokyo Commodity Exchange rose 5.1 yen to settle at 504.4 yen per kg. It jumped as high as 508.3 yen, the highest ever.
In Shanghai, which reopened on Wednesday after a week-long holiday, the key contract for May delivery rose to a record high of 43,500 yuan ($6,639) per tonne immediately after the opening, above the previous high of 41,850 yuan hit on January 31. It settled at 42,215 yuan per tonne.
"Rubber prices should rise much further, but the rises are capped by fears of falling demand after China raised interest rates to cool down its economy," one dealer said. With tight supply, the benchmark Thai RSS3 was offered at a new record high of $6.15 per kg on Wednesday, while other Asian rubber grades stayed at relatively high levels.
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