TOCOM rubber jumps on improving China economy, trade deal hopes on April 4

Tokyo Commodity Exchange (TOCOM) futures rose for a second day on Thursday, helped by optimism over top buyer China’s economy and progress in trade talks between the United States and China.

*Benchmark TOCOM rubber contract for September delivery finished 0.9 yen, or 0.5 percent, higher at 186.3 yen ($1.67) per kg.

The most-active rubber contract on the Shanghai futures exchange for September delivery rose 30 yuan to finish at 11,795 yuan ($1,756) per tonne.

“The recent healthy economic data from China, expectation for a deal from Sino-U.S. trade talks, and oil markets’ rally lent support,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

“But general sentiment in rubber markets is still weak due to high level of inventories at home and abroad,” he said, adding that the TOCOM benchmark’s gains may be capped.

Sino-U.S. trade talks made “good headway” last week in Beijing, White House economic adviser Larry Kudlow said, and President Donald Trump will meet on Thursday with Chinese Vice Premier Liu He in Washington.

Oil prices slipped a second day on Thursday, with Brent edging down further from the $70 mark after weekly U.S. oil data showed a surprise build in crude inventories and record production.

Rubber inventories in warehouses monitored by the Shanghai Futures Exchange (ShFE) rose 0.5 percent from last Friday, the exchange said on Thursday.

Japan’s benchmark Nikkei stock average edged up to a one-month high on Thursday as investors bought carmakers and other cyclical shares on growing hopes that a trade deal can be reached between Washington and Beijing.

TOCOM’s technically specified rubber (TSR) 20 futures contract for October delivery closed up 0.8 percent at 168.5 yen per kg

The front-month rubber contract on Singapore’s SICOM exchange for May delivery last traded at 149.3 U.S. cents per kg, up 0.5 percent.

The ShFE will be closed on Friday for the Tomb Sweeping Day holiday in China.