Tokyo Commodity Exchange (TOCOM) futures rose on Monday, helped by strong factory data in top rubber buyer China and a sharp drop in Shanghai's inventories, although cloudy outlook over the US-China trade talks limited gains.
TOCOM's rubber contract for May delivery finished 2.3 yen higher at 189.3 yen ($1.74) per kg, after reaching an intraday high of 192.1 yen, near the highest since early-July hit last week.
The most-active rubber contract on the Shanghai futures exchange for January delivery rose 70 yuan to finish at 12,640 yuan ($1,796) per tonne. China's new technically specified rubber (TSR) 20 futures contract was last up 20 yuan at 10,625 yuan per tonne.
"Healthy economic data in China and a plunge in China's rubber stocks prompted fresh buys," said Toshitaka Tazawa, an analyst at commodities broker Fujitomi Co. Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 53.4% from the prior week, the exchange said on Friday.
"But with growing uncertainty over US-China trade dispute, gains were capped," Tazawa said. The front-month rubber contract on Singapore's SICOM exchange for January delivery last traded at 140.0 US cents per kg, up 0.4%.
China's factory activity showed surprising signs of improvement in November, with growth picking up to a near three-year high, a private sector survey showed on Monday, reinforcing upbeat government data released over the weekend.
Beijing's top priority in any phase one trade deal is the removal of existing US tariffs on Chinese goods, China's Global Times newspaper reported on Sunday, amid uncertainty on whether the two sides can end a 17-month trade war that has depressed global growth.
Japan's benchmark Nikkei stock average rose on Monday by the most in a month after data showed China's factory activity and domestic demand picked up. The US dollar was quoted around 109.61 yen, compared with around 109.47 yen on Friday afternoon
Oil prices rose more than 1% on Monday as signs of rising manufacturing activity in China pointed to increasing fuel demand, and hints that OPEC may deepen output cuts at its meeting this week indicated supply may tighten next year.
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