Asian rubber futures settled higher Thursday, breaching key resistance at Y260 a kilogram for the first time in 14 months on fresh buying, spillover strength from gold and strong supply-demand fundamentals, said trade participants.
"The price rise is so sharp that TSR20 grade rubber is being quoted today at a price on Sicom at which RSS3 was sold yesterday," said a Singapore-based trader.
TSR20 usually sells at a 4-5 U.S. cents discount to RSS3 grade.
Physical prices of USS3 grade raw material in the central markets of Thailand traded above THB83 a kilogram as market arrivals fell below 100 metric tons again on torrential rains. Some factories even offered to buy at prices above THB84 to replenish their stocks.
The benchmark May RSS3 contract on the Tokyo Commodity Exchange settled Y5.1 higher at Y260.7 a kilogram after reaching an intraday high of Y262.9/kg. Prices have more than doubled after falling to Y99.8/kg in the first week of December 2008.
Prices were steady during the night session, and the May contract ended at Y261.9/kg. Night session prices aren't included in intraday trading.
"Gold is the market leader these days. Rubber is just following gold, prompting investors to set up long positions," said a senior executive at a Tokyo-based commodities brokerage.
Spot gold hit a record high of $1,226.30/oz during Asian trading.
"The 33% and 50% technical retracements from Y99.8/kg have already been broken, and based on a 66% retracement, the next level of resistance should be Y270/kg," said an analyst in Japan.
Retracements of more than 66% have many times indicated the end of a bull market.
The benchmark July RSS3 contract on the Agricultural Futures Exchange of Thailand settled THB2.05 higher at THB97/kg.
The benchmark March contract on the Shanghai Futures Exchange settled CNY245 higher at CNY22,260/ton.
Asian physical rubber prices were higher as sellers jacked up offers, taking leads from the commodities rally.
"Since it's the last month of the year, many trading companies are pushing up prices. They want to not only improve their earnings but also increase the book value of their inventories," said a Singapore-based exporter.
The range in which prices were offered widened as some traders were willing to sell at rates below Sicom to take profits while others pushed up levels on the pretext of tight supply.
Malaysian rubber glove makers have purchased Thai rubber latex concentrate on a delivered basis around $1,770/ton, up 31% on month, as rains have hit production and supply.
Deals for at least 700 tons were done Wednesday on a cost, insurance, freight basis, said a trading executive.
(Source: irco.biz)
No comments:
Post a Comment