TOCOM surges on bargain hunting; posts 5th straight weekly loss

Benchmark Tokyo rubber futures surged more than six percent on Friday as investors looked for bargains and on the back of firmerShanghai futures, but they still marked a fifth straight weekly fall amid concerns over a supply glut.

The Tokyo Commodity Exchange (TOCOM) rubber contract for September delivery finished 12.9 yen, or 6.4 percent, higher at 216.0 yen ($1.98) per kg. It however lost 1.14 percent on week.

The most-active rubber contract on the Shanghai futures exchange for September delivery jumped 365 yuan to finish at 14,805 yuan ($2,150.5) per tonne.

"Shanghai's rebound after diving below a key 14,000 yuan mark earlier the week lent support to TOCOM," said Satoru Yoshida, commodity analyst at RakutenSecurities.

"We may see an extension of the rally next week," he said.

Rubber producers Thailand, Indonesia, and Malaysia might limit exports of natural rubber to reduce price volatility, the head of International Rubber Consortium, an industry body set up by the three countries, said on Friday.

The TOCOM's April contract, which is due to expire next Monday, jumped 15.4 yen to end at 255.0 yen per kg.

The exchange has urged any investors with open positions in April rubber futures to settle contracts well before expiration on April 24, with exchange inventories sitting at a level low enough to pose a risk of sudden price swings.

Rubber inventories at TOCOM warehouses as of April 10 stood at 1,249 tonnes, down about four-fifths from a year earlier and the lowest since July 2010, according to the Tokyo Commodity Exchange.

The front-month rubber contract on Singapore's SICOM exchange for May delivery last traded at 155.2 U.S. cents per kg, down 0.8 cent.