Asian rubber futures settled mostly higher Monday, erasing intraday losses on the back of expectations of fresh demand amid a rebounding global economy, trade participants said.
News of Abu Dhabi bailing out neighboring Dubai with a $10 billion cash injection to help Dubai World pay off its debt provided positive leads for the market.
TSR20 again traded at a premium to RSS3 on the Singapore Commodity Exchange--in a reversal of the usual situation--due to tight supply in Indonesia.
The benchmark May RSS3 contract on the Tokyo Commodity Exchange settled Y1.4 higher at Y248.4 a kilogram.
Prices eased again slightly during the night session, with the May contract ending at Y247.9/kg. Night session prices aren't included in intraday trading.
The market opened lower, and at one time it seemed that prices might even fall to the technical support level of Y240/kg.
"There is a perception rubber futures may have reached a short-term peak when prices rose to Y264.7/kg on Nov. 27," said Mitsubishi Corporation Futures & Securities senior analyst Shuji Sugata.
Stronger technical support is at Y237, he added.
Weak crude oil is also weighing on natural rubber futures.
Nymex light, sweet crude for January delivery settled 67 cents, or 1%, lower at $69.87/bbl Friday and remained in negative territory in Asian trading on Globex Tuesday, on course to extend an eight-session losing streak that has seen it shed 11% of its value since the start of the month.
Later in the day, Tocom rubber prices rebounded, moving into positive territory on strong fundamentals and rising gold prices as well as Abu Dhabi's bailout of Dubai.
"Expectations that the global economy may be recovering gradually and that problems over Dubai's debt may finally be overcome have provided fresh support for rubber," said an analyst in Singapore.
Around 70% of world's natural rubber is used to make tires, demand for which hinges on global economic health.
The benchmark March contract on the Shanghai Futures Exchange settled CNY150 lower at CNY21,500/ton.
Benchmark July RSS3 contract on Agricultural Futures Exchange of Thailand, settled THB0.30 higher at THB88.70/kg.
Asian physical prices were lower due to lack of demand and an improving supply situation.
"China has ample supplies available at ports, so buying is limited," said an exporter in Singapore.
Trades are taking place, but buying interest is limited, said a Phuket-based trading executive.
One hundred tons of RSS3 was sold for prompt shipment to buyer in China at $2,730/ton, CIF and 500 tons special-grade STR20 was sold at $2,750/ton, CIF, he said.
(Source: irco.biz)
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