TOKYO: Key Tokyo rubber futures ended higher on Monday after news that ASEAN’s rubber group will take tough action on buyers who default on shipments, prompting some traders to say the contract could rise to 300 yen as supply concerns mount inChina.
The most active Shanghai rubber contract for May delivery closed up 0.5 percent at 26,025 yuan per tonne. Volume stood at 702,138 lots.
“With producing nations threatening to squeeze supply, buyers in China will have a hard time obtaining rubber at a time when production is decreasing due to the rainy season (in Southeast Asia) and as demand in China rises ahead of the Chinese New Year in January,” a trader said.
He said the benchmark contract would test the 300 yen mark by the end of December.
The ASEAN Rubber Business Council has blacklisted buyers who default on shipments and has urged members to ignore requests for discounts following a plunge in prices, the group said in a statement seen on Monday.
Buyers in China, the world’s largest rubber consumer, last month asked shippers in Southeast Asia to delay delivery of up to 7,000 tonnes of the commodity because of high inventory levels, which angered producing nations.
Brent crude climbed above $110 on Monday, extending gains from last week, as rising tensions between Iran and the West increased the risk of disruptions to crude shipments by the world’s fifth-largest oil exporter.
The yen was trading at 77.91 against the US dollar, easing from its November high of 76.56.
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