Asian rubber futures settled higher Wednesday after a brief bout of profit-taking as strong supply-demand fundamentals and gains in crude oil supported prices.
Physical prices of USS3 grade raw material in the central markets of Thailand again traded above THB80/kg. Some factories even offered to buy at prices above THB81 because rains have slowed production and the supply is scarce.
Tokyo Commodity Exchange rubber opened lower but recovered on fresh buying.
Tocom's April contract settled Y2.4 higher at Y249.9/kg. The new benchmark May contract opened at Y248.5 and after a marginal decline, rebounded to end at Y251.9/kg.
Prices rose further during the night session and the May contract ended at Y252.5/kg. Night session prices aren't included in intraday trading.
"There may be some profit-taking but overall fundamentals are strong, which can push up prices further," a Tokyo-based broker said.
Weakness in U.S. dollar has prompted investors to shift into commodities, and natural rubber is among the beneficiaries, he said.
On the Agricultural Futures Exchange of Thailand, the benchmark June RSS3 contract settled THB2.80 higher at THB92.50/kg.
"Prices may consolidate above THB90/kg, as there's a surge in long positions on AFET," a Thailand-based trading executive said. Supply may continue to be tight for several months, he said.
The benchmark March contract on the Shanghai Futures Exchange settled CNY125 higher at CNY21,945/ton. China is world's largest consumer of rubber by volume.
Asian physical rubber prices were higher as buyers rushed to cover their requirements amid tight supplies.
"Those traders who have committed to supply rubber to end users but are themselves short of requirements are now making purchases," an exporter in Singapore said.
Offer prices are too high, resulting in large bid-offer spreads, a Thailand-based exporter said. RSS3 grade rubber was offered at $2.72/kg versus bids at $2.66/kg, he said.
(Source: http://irco.biz)
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