Tokyo rubber futures rose almost 1 percent on Thursday, extending gains for a second day on signs that physical rubber prices may have hit a floor. Buying from Chinese and Japanese buyers has been detected on dips in the cash market.
The key Tokyo Commodity Exchange rubber contract for November 2007 delivery traded at 270.5 yen a kg, up 2.5 yen or 0.9 percent from the previous close. On Tuesday, the November contract fell as low as 264.7 yen, the lowest for any benchmark since March 19. The dollar's firmness versus the yen lent support to yen-based TOCOM prices.
But a lack of participation from investors curbed gains in rubber prices. The dollar traded at 122.60 yen, hovering near a 4-1/2-year high of 122.77 yen hit on Wednesday. China will likely import 8.7 percent more natural rubber this year from a year to feed its growing rubber industry, Fan Reined, vice chairman and secretary general of China Rubber Industry Association, said on Wednesday.
Fan told Reuters on the sidelines of a rubber conference that China, the world's biggest rubber consumer and importer, is likely to buy more natural rubber from Thailand due to higher output and the better quality of its rubber products.
Indonesia's natural rubber output is expected to grow nearly 5 percent this year to 2.765 million tonnes and the country is likely to take over Thailand as the world's top producer in less than a decade, industry officials said on Wednesday.
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