Rubber Ends Unchanged, May Drop on Yen, Thai Supply Speculation
Rubber futures in Tokyo, which closed unchanged today,
may decline later this week on speculation that supply from Thailand, the largest exporter, may gain and a stronger Japanese yen.
Futures in Tokyo swung between a gain and loss of 0.6 percent before settling at 266.6 yen per kilogram ($3,031 a metric ton). The December-delivery contract touched 260.3 yen on July 2, the lowest level since June 10, on concern that a slowing global economic recovery may weaken demand for the commodity used for tires and gloves.
The contract “may head lower tomorrow as the yen continues to appreciate, while supplies in Thailand have gradually improved,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co.
Cash prices in Thailand were also unchanged at 112.60 baht ($3.47) a kilogram today, according to the Rubber Institute of Thailand. The volume of rubber traded in southern Thailand, the main producing region, rose to 145 tons today compared with about 120 tons per day in recent weeks, Chaiwat said.
The yen traded near a seven-month high against the dollar before reports today and tomorrow that economists said will show European investor confidence weakened and U.S. service industries expanded at a slower pace. The yen rose to as much as 87.65 per dollar from 87.75 on July 2.
November-delivery rubber on the Shanghai Futures Exchange gained 1 percent to settle at 21,605 yuan ($3,191) a ton.
Still, tight global supplies and strong demand, especially from China, may support prices, the Association of Natural- Rubber-Producing Countries said in its June newsletter.
The possibility of a “marked improvement” in supply in the short term is limited given aging trees and weather constraints, the association said June 30.
Source : www.worldscrap.com