Asian rubber futures settled lower Tuesday for the third successive trading day amid long liquidation due to weaker crude oil even though supply continues to remain tight in the physical market.
All gains made in early trading were erased as investors squared off positions as concerns remain on a U.S proposal to restrict proprietary trading by banks, which can affect liquidity in commodity derivatives.
The June contract on Tocom settled Y2.0 lower at Y284.0 a kilogram, off an intraday high of Y292.0/kg.
Prices fell further during the night session with the June contract hitting an intra-session low of Y281.1/kg, a level not seen in last three weeks. Night session prices aren't included in intraday trading.
The new benchmark July contract, which hit the trading board today, moved in a Y286.1-Y294.2 before settling at Y286.2.
Prices initially moved higher but couldn't sustain at levels above Y290/kg.
"Many investors don't want to hold long positions for a long period," said an analyst in Singapore.
He said weaker crude oil during Asian trading hours also weighed on prices.
At 1030 GMT, Nymex light, sweet crude for March delivery was trading 66 cents lower at $74.60 a barrel.
The benchmark May contract on the Shanghai Futures Exchange settled CNY125 lower at CNY24,465/ton.
The benchmark August contract on the Agricultural Futures Exchange of Thailand settled THB0.85 lower at THB101.90/kg.
Asian physical rubber prices were lower tracking losses in futures markets.
"Cash market prices followed futures markets higher for several weeks and are now moving lower in tandem," said a trader in Thailand. Indonesia's SIR20 traded around $2,990/ton, free on board for March/April shipment.
(Source: irco.biz)
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