Rubber advanced for a second day as persistent rain across southern Thailand, the world’s largest producer, disrupted tapping, raising supply concerns.
The October-delivery contract climbed as much as 2.7 percent to $385.9 yen per kilogram ($4,703 per metric ton) on the Tokyo Commodity Exchange before settling at 385.8 yen.
“Buying momentum continues as the market is concerned over the supply situation in southern Thailand,” said Chaiwat Muenmee, an analyst at commodity broker DS Futures Co.
Monsoon rains were spread across the Andaman Sea and the Gulf of Thailand, covering about 40 percent of southern Thailand, according to the Rubber Research Institute of Thailand.
Farmers in Southeast Asia resumed harvesting after the traditional February-to-May low-production season. Output from the region’s major producers, which represent 92 percent of global supply, may climb 10.5 percent to 2.3 million tons in the three months through June, the Association of Natural Rubber Producing Countries said in a monthly report in April.
The decline in rubber stockpiles in Japan is supporting prices, raising speculation that the country will soon replenish inventories, said Hiroyuki Kikukawa, general manager of research at IDO Securities Co.
Crude rubber stockpiles held at Japanese warehouses fell 0.7 percent to 8,112 tons as of May 10, according to data from the Rubber Trade Association of Japan.
Further gains in rubber prices are likely to be limited as demand from China, the biggest buyer, remains low, said Chaiwat.
“Chinese buyers seem to wait for prices to fall before building up inventories.”
Bloomberg
Source: http://www.thejakartaglobe.com/business/supply-concerns-boost-rubber/443171
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