Rubber advanced to the highest level in more than five months, bolstered by a weakening yen and supply concerns following heavy rain in key producer countries. Shanghai rubber surged to the highest in more than four years.
Futures in Tokyo gained as much as 3 percent to 332.5 yen per kilogram ($4,046 a metric ton), the highest level since April 19, before settling at 328.2 yen. Shanghai futures soared as much as 1.7 percent to 29,565 yuan a ton ($4,430), the highest level since May 2006, after floods in China’s southern island province of Hainan raised concerns that plantations may have been damaged.
“The yen weakening against dollar is part of the reason for bullish movement of Tocom rubber,” said Ker Chung Yang, analyst at Phillip Futures Ltd. Heavy rainfall in Thailand and Malaysia and floods in Hainan have disrupted production, Ker said by phone today from Singapore.
Flooding in Hainan forced the evacuation of 440,000 people and destroyed 3,000 houses, with more rain expected, Xinhua News Agency reported today, citing Governor Luo Baoming. A total of 166,700 hectares of crops have been damaged, including 74,000 hectares destroyed, the news agency said.
The March-delivery contract on the Shanghai Futures Exchange gained 0.9 percent to close at 29,335 yuan.
“Rainfalls continue in Thailand and the storm in China damaged crops, raising concerns about supply availability,” Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co., said by phone today.
Supply Shortage
Cash prices in Thailand rose 2.6 percent today to 116.50 baht ($3.87) per kilogram as China, the largest buyer, continued to purchase after the National Day holiday, according to the Rubber Research Institute of Thailand.
Rubber prices in Indonesia, the world’s second-largest producer, surged to a record today at $3.85 a kilogram as heavy rain disrupted tapping, lowering production, according to the Rubber Association of Indonesia.
The price may advance to $4 a kilogram by the end of the month because of a “supply shortage,” while domestic demand keeps expanding, Asril Sutan Amir, the association’s chairman, said by phone today.
The Japanese currency weakened after the country’s Economy Minister Banri Kaieda said today that rapid yen appreciation is undesirable. The yen fell to 82.36 a dollar after yesterday reaching 81.39 yen, the highest level since April 1995.
Japan will take “bold” measures on the yen and is ready to intervene when needed, Kaieda told reporters in Tokyo. Japan will also try to seek “understanding” from other countries regarding efforts to stem the yen’s rise against other currencies, Kaieda said.
Futures in Tokyo gained as much as 3 percent to 332.5 yen per kilogram ($4,046 a metric ton), the highest level since April 19, before settling at 328.2 yen. Shanghai futures soared as much as 1.7 percent to 29,565 yuan a ton ($4,430), the highest level since May 2006, after floods in China’s southern island province of Hainan raised concerns that plantations may have been damaged.
“The yen weakening against dollar is part of the reason for bullish movement of Tocom rubber,” said Ker Chung Yang, analyst at Phillip Futures Ltd. Heavy rainfall in Thailand and Malaysia and floods in Hainan have disrupted production, Ker said by phone today from Singapore.
Flooding in Hainan forced the evacuation of 440,000 people and destroyed 3,000 houses, with more rain expected, Xinhua News Agency reported today, citing Governor Luo Baoming. A total of 166,700 hectares of crops have been damaged, including 74,000 hectares destroyed, the news agency said.
The March-delivery contract on the Shanghai Futures Exchange gained 0.9 percent to close at 29,335 yuan.
“Rainfalls continue in Thailand and the storm in China damaged crops, raising concerns about supply availability,” Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co., said by phone today.
Supply Shortage
Cash prices in Thailand rose 2.6 percent today to 116.50 baht ($3.87) per kilogram as China, the largest buyer, continued to purchase after the National Day holiday, according to the Rubber Research Institute of Thailand.
Rubber prices in Indonesia, the world’s second-largest producer, surged to a record today at $3.85 a kilogram as heavy rain disrupted tapping, lowering production, according to the Rubber Association of Indonesia.
The price may advance to $4 a kilogram by the end of the month because of a “supply shortage,” while domestic demand keeps expanding, Asril Sutan Amir, the association’s chairman, said by phone today.
The Japanese currency weakened after the country’s Economy Minister Banri Kaieda said today that rapid yen appreciation is undesirable. The yen fell to 82.36 a dollar after yesterday reaching 81.39 yen, the highest level since April 1995.
Japan will take “bold” measures on the yen and is ready to intervene when needed, Kaieda told reporters in Tokyo. Japan will also try to seek “understanding” from other countries regarding efforts to stem the yen’s rise against other currencies, Kaieda said.
(bloomberg.com)
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