Tokyo rubber futures hit record high on supply concerns

Tokyo  (january 18, 2011) : key tokyo rubber futures rose to a record peak on monday, with traders expecting further gains on mounting concerns over supply tightness when demand remains solid in emerging countries. the benchmark rubber contract on the tokyo commodity exchange for june delivery rose 3.9 yen or 0.9 percent to settle at 458.3 yen per kg. the contract hit a record high of 460.4 yen earlier on monday.
the most active shanghai rubber futures contract for may delivery closed at 38,260 yuan ($5,808) after rising as high as 38,885 yuan, which was just short of a record high of 38,920 hit in november. volume stood at 657,014 lots. the rally in shanghai rubber futures lost steam as chinese shares fell more than 3 percent on monday afternoon, partly weighed down by the chinese central bank's announcement late last friday of a rise in chinese lenders' reserve requirements.
"news that bridgestone took up offers around $5.30 sparked the latest round of buying, and speculators betting on a bullish market outlook are adding to the price rally," said kazuhiko saito, chief analyst at trading house fujitomi. "i think market players expect tocom prices to reach 470 yen this week and are eyeing 500 yen towards next month, as investor sentiment will be affected when wintering really starts," saito said, referring to the period in february to march when tapping typically falls.
bridgestone corp, michelin and goodyear tire & rubber bought sir20 at 239.50 us cents a pound to 240 us cents ($5.28 to $5.29 a kg) for march delivery, dealers said on friday. thai rss3, the most expensive grade in southeast asia, changed hands at $5.42 to $5.44 a kg.

(Source: http://www.brecorder.com/news/agriculture-and-allied/world/1144667:tokyo-rubber-futures-hit-record-high-on-supply-concerns.html?hl=rubber)