TOKYO (Dec 21): New benchmark Tokyo rubber futures gave up earlier gains to end lower on Friday, sliding from a 4-month high, but still booked a fourth consecutive weekly gain amid expectations that top producers would agree on measures to help shore up prices.
Representatives from top rubber producers Thailand, Malaysia and Indonesia, which comprise the International Tripartite Rubber Council (ITRC), will meet before the year-end to finalise measures to improve the market, that would be implemented early in 2019, the Council said in a statement last week.
"On top of seasonal strength of the market, an anticipation that main producing countries would come up with some measures to support prices lent support," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
But some investors took profit ahead of the three-day weekend in Japan as global stocks extended a steep sell-off, dealers said. Japanese market will be closed on Monday due to a national holiday.
The Tokyo Commodity Exchange (TOCOM) rubber contract for the new June delivery finished at 173.1 yen (US$1.56) per kg, down 1.4 yen or 0.8% from an opening price of 174.5 yen. It touched the highest since Aug 23 of 178.2 yen in late afternoon trade.
The TOCOM benchmark, which sets the tone for rubber prices in Southeast Asia, marked a 2.7% gain for the week, logging the longest weekly winning streak in about one year.
"If global stock market's rout continues, the TOCOM will likely to come under selling pressure next week," Kikukawa said.
TOCOM's technically specified rubber (TSR) 20 futures contract for June delivery fell 0.5% to close at 147.6 yen per kg.
The most active rubber contract on the Shanghai futures exchange for May delivery dropped 95 yuan to finish at 11,325 yuan (US$1,640) per tonne.
The front-month rubber contract on Singapore's SICOM exchange for January delivery last traded at 127.5 U.S. cents per kg, down 0.5 cent.
(US$1 = 111.0800 yen)
(US$1 = 6.9039 Chinese yuan renminbi)