Asian rubber futures settled down Monday but off lows after the Association of Natural Rubber Producing Countries said physical supplies were still tight with production falling by more than 5.0% in 2009.
However, the rubber futures market remains concerned over the U.S proposal to restrict proprietary trading by banks, which can affect liquidity in commodity derivatives.
The benchmark June contract on the Tocom traded Y3.3 lower at Y286.0 a kilogram, after hitting an intraday low of Y281.5/kg.
Prices rose marginally during the night session with the June contract hitting an intra-session high of Y286.7/kg. Night session prices aren’t included in intraday trading.
Fundamentals are favorable for natural rubber prices to stay bullish, Djoko Said Damardjati, secretary general of the Association of Natural Rubber Producing Countries, said Monday.
ANRPC member countries control around 94% of the world’s natural rubber output.
Djoko dismissed as baseless media reports earlier this month that major producing countries plan to release 300,000 metric tons of natural rubber in the market.
“None of the natural rubber producing countries hold any buffer stock of natural rubber,” he said in the ANRPC’s monthly report released worldwide. Putting a curb on rubber prices wasn’t on the policy agenda of any major exporting country, he added.
“Lower crude oil and uncertainity over U.S. banks’ investment in commodity futures are weighing on rubber prices but tight supply in growing regions is supportive,” an analyst in Singapore said.
The benchmark May contract on the Shanghai Futures Exchange settled CNY70 lower at CNY24,590/ton, off an intraday low of CNY24,305/ton.
The benchmark August contract on the Agricultural Futures Exchange of Thailand settled THB0.95 lower at THB102.75/kg.
Asian physical rubber prices were lower in line with a correction in the futures markets, prompting strong buying interest.
“After Friday’s downward correction continued today, buyers came in to lock in cargoes,” said an exporter in Singapore.
Several deals in Indonesia’s SIR20 cargoes were finalized after prices fell below $3,000/ton.
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