Tokyo Commodity Exchange (TOCOM) futures rebounded from early losses to end higher on Friday, as sentiment improved after equities staged a recovery, but they booked their third straight weekly decline on panic over the coronavirus.
TOCOM's rubber contract for August delivery finished 2.1 yen higher at 162.2 yen ($1.53) per kg. Still, it posted a weekly loss of 3.6%. "Investors unwound short positions as global equities found some ground in later trade," said Hideshi Matsunaga, analyst at Sunward Trading, adding that Bank of Japan's pledge to boost liquidity also helped.
"It was all about panic selling this week, having all the financial products, even gold and bonds, sliding, but investors at least in rubber markets will likely take a breather next week," he said. Matsunaga forecasts that the virus spread could reduce annual rubber demand by 5%, but drought in top producer Thailand may also reduce supply by 5%.
The most-active rubber contract on the Shanghai futures exchange for May delivery rose 130 yuan to finish at 10,540 yuan ($1,507) per tonne. The front-month rubber contract on Singapore's SICOM exchange for April delivery last traded at 127.1 US cents per kg, up 0.8%. Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 0.3% from last Friday, the exchange said.