TOKYO (Jan 18): Benchmark Tokyo rubber futures erased early losses to end slightly higher on Wednesday in line with Shanghai futures, helped by concerns about tightness in supply.
Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, and Shanghai futures both stood near multiple-year highs hit on Tuesday that were largely triggered amid worries over supply tightness due to continued rains in major exporter Thailand.
Thailand is one of the world's most important producers of natural rubber and the national rubber authority recently said output in 2016–2017 would be about 10% lower because of the floods.
A Tokyo-based broker said supply worries are expected to provide a major support to the market for the foreseeable future.
The Tokyo Commodity Exchange rubber contract for June delivery finished 1.2 yen higher at 300.9 yen (US$2.66) per kg, also helped by a slight recovery in the dollar against the yen.
The most-active rubber contract on the Shanghai Futures Exchange for May delivery fell 25 yuan to finish at 21,295 yuan (US$3,111) per tonne.
The front-month rubber contract on Singapore's SICOM exchange for February delivery last traded at 219.90 US cents per kg, up 1.1 US cent.
In corporate news, Bridgestone said on Wednesday its European unit had entered into an exclusive agreement with the shareholders of Groupe Ayme for the acquisition of the largest independent tyre specialist in France.
(US$1 = 113.2700 yen)
(US$1 = 6.8444 Chinese yuan)