Asian rubber settled mostly off highs Wednesday on long liquidation and profit taking amid concerns that China may tighten its monetary policy, which can adversely affect liquidity.
However, physical prices of Thai USS3 raw material were higher and even rose above THB96 a kilogram in the three central markets as demand exceeded supply.
The benchmark June RSS3 contract on the Tokyo Commodity Exchange settled Y1.8 higher at Y300.8/kg, well off an intraday high of Y305.5.
Prices fell during the night session and the June contract settled at Y297.7/kg. Night session prices aren't included in intraday trading.
Initially, prices rose on a weaker Japanese yen against the U.S. dollar and a 1.3% overnight rise in crude oil futures but eased thereafter as investors scrambled to take profits.
There was market talk of China curbing bank loans that sent commodities and equities lower in the afternoon.
Despite reports of China tightening lending, with spillover pressure on rubber, "fundamentally, the uptrend is intact," said an analyst in Singapore.
He said Chinese demand is strong, while the wintering season in Thailand is approaching, which will curb production and supply due to lower yields.
The benchmark May contract on the Shanghai Futures Exchange settled CNY400 higher at CNY25,445/ton.
The benchmark August contract on the Agricultural Futures Exchange of Thailand settled THB0.85 lower at THB105.85/kg.
Asian physical rubber prices were higher, but market activity was sluggish. High prices damped buying interest even though some deals were finalized by importers in China, said a trader in Thailand.
(Source: irco.biz)
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