Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, surged to their highest in nearly 9 months on Tuesday, driven by hopes that Sino-US trade talks were making progress, and tracking a rally in Shanghai futures. The benchmark TOCOM rubber contract for July delivery finished 6.5 yen, or 3.5 percent, higher at 193.5 yen ($1.75) per kg, after touching the highest since May 30, 2018 of 194.2 yen earlier in the session.
The most-active rubber contract on the Shanghai futures exchange for May delivery jumped 630 yuan to finish at 12,375 yuan ($1,826) per tonne. It rose to 12,425 yuan, the highest since Oct. 11, 2018, earlier in the session. TOCOM's technically specified rubber (TSR) 20 futures contract for August delivery closed up 2.8 percent at 163.8 yen per kg.
The front-month rubber contract on Singapore's SICOM exchange for March delivery last traded at 142.8 US cents per kg, up 4.8 percent. A new round of talks between the United States and China to resolve their trade war will take place in Washington on Tuesday, with follow-up sessions at a higher level later in the week, the White House said on Monday.
"In addition to growing optimism over the US-China trade negotiations, expectations for more stimulus by Beijing to boost the Chinese economy lent support to the TOCOM as well as the Shanghai futures," said Hiroyuki Kikukawa, general manager of research at Nissan Securities. The US dollar was quoted around 110.65 yen, compared with around 110.52 yen on Monday afternoon
Brent crude oil prices eased away from 2019 highs on Tuesday on caution that economic growth may dent fuel demand this year, although supply cuts led by producer cartel OPEC still meant markets were relatively tight.
