Malaysian, S'pore rubber markets up

Malaysian, S'pore rubber markets up

KUALA LUMPUR (Reuter): Malaysian rubber prices ended sharply higher yesterday after players chased the Tokyo market which surged in tandem with the yen, traders said.

"The market is still very hollow and there's no desperate need for rubber at the moment," said a trader. "We were just chasing the Tokyo market, which hit limit-up."

Traders said the market was generally void of advanced orders, with most purchases meant for immediate shipment, as prices for all grades had risen too steeply.

"It's a sellers market now and prices are a bit overdone. They have to consolidate," said a trader.

Rumors of enquiries from China and the Middle East were believed to have aided sentiment, traders said.

They said it was unlikely that prices will match buyers' expectations in the near term as production and trading was expected to take a slide with the Lunar New Year and Aidil Fitri holidays in February and wintering season in March.

"If buyers want rubber, they'll have to buy it soon. The longer they wait, the higher prices seem to be going," said a dealer.

Another dealer said the tightest supply situation was expected in April at the height of the wintering season.

Meanwhile, Singapore rubber futures were mostly higher by the close although some positions were off the day's highs on late profit-taking, traders said yesterday. Volume was moderate.

Traders said early buying interest was fanned by a strong rally in post-holiday Tokyo trade.

All months on the Tokyo rubber futures closed sharply higher on Thursday, hitting their limit of eight yen a kg on active fresh buying by local investors.

The buying was triggered by yen's plunge against the U.S. dollar during the long New Year holidays and bullish sentiment in other commodities.

Singapore traders said the Tokyo's sharp rise on resumption of trading was not unexpected.

"Singapore prices have been rising since Christmas and Tokyo obviously needs to catch up," one international firm's trader said.

Sentiment was underpinned by year-end dealer book-squaring and window-dressing, worries of nearby supplies due to rains in growing areas in the region. By 0945 GMT, Feb. RSS3 was 1.75 U.S. cents higher at 163.50 cents a kg from the last settlement.