RUBBER extended gains for a fourth day and reached the highest level in five months amid declining supply in Thailand and after Europe agreed on a second bailout for Greece.
The July-delivery contract advanced 2.8% to settle at 337.6 yen/kg (US$4,220 /metric tonne), the highest settlement level since Sept. 22, on the Tokyo Commodity Exchange. Futures have gained 28 % this year. May-delivery rubber on the Shanghai Futures Exchange climbed 0.7 % to close at 29,100 yuan (US$4,622)/tonne.
Concerns eased that the European debt crisis may derail a global recovery and weaken raw material demand as seven months of negotiations ended in the pre-dawn hours in Brussels with Greece winning EUR130 billion (US$172 billion) in aid it needs to avoid a March bankruptcy. Many plantation areas in Thailand, the world’s largest exporter, have entered low-production season when latex tapping declines, according to the Rubber Research Institute of Thailand.
“Declining supplies in Thailand coupled with easing concerns over the European debt crisis helped boost prices,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co.
Higher oil prices were also supportive as crude rallied to a nine-month high after Iran said it stopped selling to France and Britain, boosting the appeal of natural rubber as an alternative to synthetic products. Oil for April delivery climbed to US$106.41 a barrel, the highest level since May 5, on the New York Mercantile Exchange.
The Thai cash price gained 0.4 % to 126.35 baht (US$4.13)/kg today, the rubber institute said.
Source: Business Week