Asian rubber futures settled off highs Thursday after the International Rubber Consortium announced the lifting of 11-month-old curbs on exports, prompting profit taking ahead of an extended weekend in major growing regions, said trade participants.
Tocom's new benchmark May contract settled Y1.2 higher at Y253.1/kg, off an intraday high of Y255.3/kg.
Prices eased further during the night session and the May contract ended at Y249.9/kg, down 1.3% from the morning session. Night session prices aren't included in intraday trading.
"The market is holding quite nicely...Current price levels are attractive for producers," IRCo Chief Executive Abdul Rasip Latiff told Dow Jones Newswires.
He said since IRCo's objective of shoring up abysmally low prices has been achieved, export controls aren't needed any longer.
IRCo's decision indicates that suppliers are keen to push more rubber into the global market and cash in on the latest price gains, said an exporter in Singapore.
He said rains are disrupting the production and transportation of rubber, and therefore, an actual improvement in supply is unlikely.
"IRCo's move has had a psychological impact, providing a green signal to traders to liquidate their long positions and take profits, but overall fundamentals will continue to remain strong," said an executive at a Tokyo-based commodities brokerage.
He said it's difficult for IRCo to boost supply at a time when the weather is adversely affecting supply.
IRCo members Malaysia, Indonesia and Thailand control 70% of the world's natural rubber supply.
On the Agricultural Futures Exchange of Thailand, the benchmark June RSS3 contract settled THB1.40 lower at THB91.10/kg on long liquidation following IRCo's easing of export curbs.
The benchmark March contract on the Shanghai Futures Exchange settled CNY205 higher at CNY22,150/ton. China is the world's largest consumer of rubber by volume.
Asian physical rubber prices were steady, but there was a lack of buying interest because some traders consider current levels too costly.
"China is already saddled with large inventories and many importers are prepared to cut down on production rather than make purchases at such high levels," said a Singapore-based exporter.
Thailand's RSS3 grade rubber traded at $2.70/kg, FOB, for December shipment versus offers at $2.74/kg.
(Source: http://irco.biz)
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