VIENTIANE, June 19 (Reuters) – Tokyo rubber futures, which set the tone for physical prices, are technically bullish and could potentially challenge the 200 yen per kg level again, analyst Daryl Guppy said on Friday. “The key factor is a move above 180 in TOCOM gives you an upside target around 260,” Guppy, director of Guppytraders.com, told Reuters on the sidelines of a regional rubber conference in the Laotian capital.
“Within TOCOM and within the rubber markets, the context is a steady upward rising trend. Remember, they are long-term targets, so they are not going to happen tomorrow or whatever,” he said.
The most active contract on TOCOM, currently November 2009 , last traded around 180 yen in November of 2008 and hovered around 260 yen last October. The contract was around 160 yen per kg on Friday.
A Reuters poll showed that purchases by tyre makers, steady demand from main consumer China, tight supplies in Southeast Asia and high oil prices are expected to push up rubber prices in June. [RUB/POLL]
“We expect to see some consolidation at 260-280 yen. A move above 280 and a longer-term price gives us 320-340 target,” said Guppy.
Tokyo rubber futures, whose movements are often dictated by the yen and oil prices, hit a 28-year high at 356.9 yen per kg in late June of 2008.
The market tumbled to a six-year low in December on fears of falling demand for cars during the global economic slowdown before rebounding to current level, partly driven by China’s buying in the physical market.
“China is the essential factor in world recovery. China market has the strongest and most sustainable recovery of any global market,” said Guppy.
China’s demand for rubber is expected to rise 8.5 percent in 2010 to reflect strong growth in the country’s auto sector, the president of China’s Rubber Industry Association said.

Source: Reuters

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