TOCOM RALLIES TO FOUR-MONTH HIGH, PARES GAINS ON PROFIT-TAKING

Benchmark Tokyo rubber futures rallied for a third straight session on Friday, breaking through the 170 yen mark for the first time in four months, due to technical buying, but pared gains as investors locked in profits ahead of the weekend.

"Buying gathered momentum as the benchmark has moved away from a narrow range of 150 yen to 160 yen," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

"Behind the sharp gain this week were also higher freight rates and some traffic disruption in the light of the bankruptcy of South Korea's Hanjin Shipping Co Ltd, as well as heavy rain in rubber growing areas in Thailand," he added.

The collapse of Hanjin under debts of $5.5 billion has caused havoc in global trade networks and a surge in freight rates. Some vessels have also been seized.

The Tokyo Commodity Exchange (TOCOM) rubber contract for February delivery <0#2JRU:> ended up 0.6 yen, or 0.4 percent, at 169.0 yen ($1.68) per kg. Earlier in the session, it hit a high of 170.9 yen, the highest since May 18.

The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, posted a weekly gain of 7.2 percent, the biggest since mid-July.

"If oil prices get a boost from a planned gathering of OPEC ministers next week, rubber prices may also move higher, but if not, they are likely to come under profit-taking pressure," Kikukawa said.

Oil prices eased after two days of strong gains on caution ahead of a gathering of OPEC ministers next week in Algeria to discuss possible production cooperation to rein in global oversupply.

The most-active rubber contract on the Shanghai futures exchange for January delivery rose 105 yuan to finish at 13,550 yuan ($2,031.58) per tonne.

The front-month rubber contract on Singapore's SICOM exchange for October delivery last traded at 143.3 US cents per kg, down 1.1 cent.