Tokyo rubber futures bounced back from early lows on Thursday as substantial bargain-hunting emerged on dips on views that fundamentals remained bullish amid a supply shortage from top producer Thailand.
"Prices eased but the situation really hasn't changed. Many buyers still haven't secured physical supplies as there aren't enough shipments coming in from Thailand," he said. The benchmark December TOCOM rubber contract closed up 0.8 yen, or 0.44 percent, at a session high of 183.5 yen.
Other contracts closed up 0.1 to 1.1 yen, with the exception of spot July, which ended down 0.5 yen, or 0.25 percent, at 202.5.
Key producers such as Indonesia and Malaysia were not in a hurry to offer fresh supplies as TOCOM prices were showing little signs of falling, traders said.
TOCOM prices were also supported by falling warehouse inventories, which have been at record lows since mid-June.
The latest survey by the Rubber Trade Association of Japan, released on Friday, showed crude rubber stocks at private Japanese warehouses fell to a record-low 9,317 tonnes as of July 10, down 5.4 percent from 9,852 tonnes on June 30.
Traders said there are few reasons to sell rubber now, and fund operators have shifted large amounts of money into rubber in the past two months, another factor exaggerating the uptrend, traders said. Fund operators were believed to be holding more positions in rubber following the rallies since May.
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