Rubber prices continue to strengthen in early trading today, Thursday (20/7/2017), following reports of rising car sales in China.
The price of rubber for December 2017 delivery, the most-active contract on the Tokyo Commodity Exchange (Tocom), climbed 1.97 percent or 4.10 points to 211.80 yen per kilogram (kg) at 07.37 pm.
Earlier this morning, the price of the rubber opened with a 0.67% rise or 1.40 points at 209.10 position, after on Wednesday (19/7) closed 3.08% or 6.20 points at 207.70.
Yutaka Shoji analyst Gu Jiong said higher car sales in China boosted expectations of growing rubber imports. "As a result of commodity prices are strengthened," said Gu Jiong, as quoted from Bloomberg.
Car sales in China rose 4.6% in June 2017 (y-o-y), while vehicle production in China rose 3.9% from the previous month (m-o-m).
In addition, prices are driven by the decline in rubber stocks in the Port of Qingdao. Total rubber reserves on July 7, 2017 fell 4.1% to 208,100 tons from the previous week.
Meanwhile, Chairman of Indonesian Rubber Companies Association (Gapkindo) Moenardji Soedargo said the reduction of exports is not a solution to boost the price of falling rubber.
As is known, several times representatives from Thailand, Malaysia, and Indonesia will discuss ways to raise the price of rubber, one of them by reducing the volume of exports. The three countries account for 60% of global natural rubber supplies.
According to Moenardji, fundamentally the natural rubber market is in healthy condition. Even this year there is a possibility of deficit.
The strengthening of rubber prices can continue for the second day although at the same time the performance of currency continues to appreciate. The yen today tracked up 0.13% or 0.14 points to 111.83 yen per US dollar at 07.43 pm, after yesterday ended up appreciating 0.09% at 111.97.
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