ERJ staff report (TP)
Tokyo − Rubber prices swung in Tokyo amid speculation that China may step up purchases for its state reserves while the stronger Japanese currency reduced the appeal of yen-based futures, reported Aya Takada for Bloomberg.
The contract for delivery in May on the Tokyo Commodity Exchange traded little changed at 274.6 yen (€1.97) a kg at 11:31 am (Japan time, 5 December) after advancing as much as 1.1 percent and falling 0.4 percent. Futures settled at 275.3 yen (€1.98) on 2 December, the highest level in two months.
China, the world’s largest consumer of the commodity, may increase government inventories this week to support farmers and mop up oversupply after local prices slumped, according to Orient Futures Co. The yen appreciated to 102.16 per dollar after a report yesterday showed the US added more jobs than analysts predicted last month, raising speculation the Federal Reserve may bring forward cuts to stimulus.
“A rally in rubber futures took a breather as it lost support from the currency market,” said Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo. “There were no aggressive sellers as speculation of Chinese buying remains.”
Officials from the State Reserve Bureau meet in Beijing today (5 December) with executives from Sinochem International Corp., China Hainan Rubber Industry Group Co. and Yunnan State Farms Group Co., the three biggest domestic suppliers, said Yan Xinbing, an analyst at Orient Futures, citing talks with the companies. The bureau bought about 100,000 tonnes in the past month from the suppliers, Yang said.
Futures for May delivery on the Shanghai Futures Exchange lost 0.3 percent to 19,555 yuan (€2,360) a tonne. Thai rubber free-on-board was unchanged at 81.95 baht (€1.86) a kg yesterday (4 December), according to the Rubber Research Institute of Thailand.
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Full story from Bloomberg