Asian rubber futures settled mostly higher Tuesday, breaching Y240 per kilogram for the first time in more than a year as Japan's inventories hit historically low levels amid strong support from hedgers and a rebound in crude oil prices, trade participants said.
Physical prices of USS3 raw material in the central markets of Thailand rose toward THB77/kg due rain-disrupted supply.
Benchmark Tocom RSS3 April contract settled Y1.6 higher at Y238.3/kg, off an intraday high of Y240.7, a level not seen since October last year.
Prices eased slightly during the night session, with the April contract ending at Y237/kg. Night session prices aren't included in intraday trading.
The gains are in line with the expectations of traders who said Friday that prices would rise above Y240/kg imminently.
"Many importers are covering their requirements for December and January, expecting a further rise in prices," said an exporter in Singapore.
Sellers in the physical market are taking long positions on Tocom, he said.
Natural rubber stocks in Japan as of Nov. 10 declined to 3,902 metric tons from 4,038 tons Oct. 31, according to data issued by the Rubber Trade Association of Japan.
Japan's natural rubber stocks have declined 61% since end-May.
Thailand's natural rubber output will likely fall by more than 10% in 2009 as ongoing rains have adversely affected production, trading executives said.
Thailand produced 3.0 million metric tons of natural rubber in 2008.
The weather bureau warned that flash floods may occur in the southern region of Chumphon, and that monsoon rains are likely to strengthen in southern parts of Thailand from Wednesday.
The bulk of Thailand's natural rubber is produced in southern areas. Rainfall prevents growers from tapping trees, reducing output.
The benchmark March contract on the Shanghai Futures Exchange settled CNY125 higher at CNY20,925/ton. China is world's largest consumer of rubber by volume.
In the Agricultural Futures Exchange of Thailand the benchmark June RSS3 contract settled THB0.10 lower at THB84.05/kg.
Asian physical prices were mostly lower but Indonesian grades climbed due to a jump in demand. It's a sellers' market for Indonesian SIR20, said a Singapore-based exporter, pointing towards the weather-induced tight supply.
(Source: http://irco.biz)
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