Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, rose on Tuesday, tracking a rally in Shanghai futures amid hopes that China's tax cut will help boost the economy in the world's top rubber buyer. The benchmark Tokyo Commodity Exchange (TOCOM) rubber contract for August delivery finished 0.9 yen, or 0.5 percent, higher at 195.2 yen ($1.75) per kg.
The most-active rubber contract on the Shanghai futures exchange for May delivery jumped 110 yuan to finish at 11,985 yuan ($1,785) per tonne. TOCOM's technically specified rubber (TSR) 20 futures contract for September delivery closed up 0.6 percent at 171.0 yen per kg
The front-month rubber contract on Singapore's SICOM exchange for April delivery last traded at 147.7 US cents per kg, up 0.1 percent. China will cut value-added tax for manufacturing and other sectors on April 1, Premier Li Keqiang said on Friday, adding that cuts in taxes and fees remained a key measure to cope with downward pressure on its economy.
"TOCOM gained support from surging Shanghai prices as well as stronger oil markets," a Tokyo-based dealer said. "Relatively firmer physical prices in Thailand also lent support to both Shanghai and Tokyo," he added. Oil prices were near 2019 highs, supported by supply cuts led by producer club OPEC. US sanctions against oil producers Iran and Venezuela are also boosting prices, although traders said the market may be capped by rising US output.
