Asian rubber futures settled off lows Thursday, bouncing back on speculative buying after falling for the fifth successive trading day and slipping to a five-week low, said trade participants.
They said the market could test the daily upper limit Friday - rise by Y10 a kilogram - on the back of further buying support.
Thai firms resuming natural rubber exports to South Korea's Kumho Tire Co. and strong physical purchases by tire makers in China and Japan also supported the market.
The benchmark July contract on Tocom settled Y3.4 lower at Y274.8/kg, off an intraday low of Y269/kg, a level not seen since Dec. 24.
Prices recovered sharply in the night session, with the July contract ending at an intra-session high of Y283.6/kg.
Between morning and night sessions, prices moved in a wide range spanning Y14.6. In the morning session prices were almost limit-down while in the night session they were almost limit-up.
"As prices moved below Y280/kg, many funds were taken off guard and had to liquidate longs to cut losses," said an executive at a Tokyo-based commodities brokerage, noting this was in continuation of yesterday's trend, with investors liquidating long positions in June instead of rolling them over to July.
Speculative buying and short covering by shippers and physical dealers helped prices recover.
Traders put Y278.6/kg as a point of key technical resistance; with the breaking of this level in the night session, buying by large institutional funds resumed.
Thailand's natural rubber manufacturing firms have resumed shipments to South Korea's Kumho Tire Co., Bangkok-based trading executives said Thursday.
"The bank has opened the line of credit, so we are guaranteed our payment and will ship out one of the cargoes as soon as the vessel is arranged," said an executive at one of the Thai suppliers with a long-term contract to supply natural rubber to Kumho.
Kumho is now under a debt rescheduling program together with Kumho Industrial Co. as part of the parent group's fundamental restructuring.
The benchmark May contract on the Shanghai Futures Exchange settled CNY810 lower at CNY23,145 a metric ton, off an intraday low of CNY22,760.
The new benchmark September contract on the Agricultural Futures Exchange of Thailand settled THB1.65 higher at THB100.95/kg, off an intraday low of THB97.50.
Thai natural rubber manufacturing firms Thursday sold RSS3 grade rubber to tire makers in Japan at $3,030/ton, free on board Bangkok, for shipment in containers in February, as buyers snapped up cargoes to take advantage of the recent downward correction in prices.
(Source: irco.biz)
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