Asian rubber futures mostly settled higher Friday on fresh buying, taking leads from a stronger dollar and demand in the cash market, said trade participants.
Physical prices of USS3 grade raw material in the central markets of Thailand traded above THB84 a kilogram as factories scrambled to lock in their requirements amid a rise in market arrivals. Some factories even offered to buy at prices around THB85/kg.
The benchmark May RSS3 contract on the Tokyo Commodity Exchange settled Y1.8 higher at Y262.5/kg after reaching an intraday high of Y263.8/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 Y263.6/kg. Night session prices aren't included in intraday trading.
The market initially fell on profit taking ahead of the weekend, but then a weaker yen prompted fresh buying by bullish investors.
The U.S. dollar was being quoted above Y88 during Asian trading hours, well off a 14-year low of Y84.82 hit last week.
"The pattern of buying, profit taking and then quickly buying again is likely to continue," said a Tokyo-based broker.
Tocom is considering changes to its delivery mechanism for natural rubber futures to boost volume.
It is considering allowing deliveries for natural rubber contracts on a free-on-board basis inBangkok or Singapore, as Southeast Asia is the major producing region for the commodity, Executive Officer Mitsuhiro Onosato told Dow Jones Newswires on the sidelines of an industry conference.
Currently, Tocom rubber futures contracts are deliverable only in Japan.
If allowing delivery of rubber contracts outside Japan is difficult, another proposal under consideration is to facilitate exchange of futures for physicals, or EFP, he said.
Tocom is also considering the revision of trading hours for rubber to suit the schedule of traders outside Japan, though technologically, it's difficult to make an exception for just one commodity, he said.
The benchmark July RSS3 contract on the Agricultural Futures Exchange of Thailand settled THB0.15 lower at THB96.85 a kilogram.
The benchmark March contract on the Shanghai Futures Exchange settled CNY185 higher at CNY22,445/ton.
Asian physical prices were mostly steady on strong buying and a lack of sufficient supply.
"The market is trading in a wide range, depending on the quality and availability," said a Hat Yai-based trader.
He said 300 tons of special grade STR20 rubber was sold at $2,910/ton, FOB Singapore, and 200 tons were sold to a buyer in South Korea at $2,900/ton, FOB.
(Source: irco.biz)
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