Tokyo rubber futures slid on Friday, tracking falls of other commodities, but prices were still supported and closed above the key support at 260 yen. The benchmark rubber contract on Tokyo Commodity Exchange for November delivery fell 1.3 yen to settle at 264.5 yen ($2.14) per kg.
It fell to an intrude low of 261.6 yen, or 1.6 percent lower than the previous day, before speculative buying set in. London Brent crude settled down 20 cents at $70.22 a barrel on Thursday, adding to a $1.42 fall a day, under pressure from building US crude stockpiles and expectations of slower supplies from Nigeria due to a strike.
Gold held steady after falling to a one-week low on Thursday. However, TOCOM prices rebounded as players bought back contracts. Some of them were short covering when prices fell to near a three-month low at 261.4 yen it hit on June 21, the lowest since mid-March.
"It's a good sign that prices could stay above 260 yen and I expect a brief rebound," a dealer said. On the physical front, rubber prices were mostly unchanged despite the fall on TOCOM. But prices were not expected to fall sharply as strong demand, especially from China, the world's biggest rubber consumer, provided support, traders said.
Traders said tyre-makers such as Bridgestone and Chinese clients bought Thai RSS3 at $2.15-2.18 per kg. However, supply was expected to improve gradually and ease prices down over the next few weeks as rain subsides in producing countries.
"In Malaysia, the weather is fine and I think it should be 100 percent OK by July," a Malaysian trader said. The price of Thai USS3, the raw material of export-grade rubber sheet (RSS3), dropped below 70 baht per kg for the first time in a couple of months, reflecting improving supply in the world's biggest rubber producer.
Comments
Comments are closed for this article.