Rubber Market to Stay Strong on Supply, Group Says

Rubber Market to Stay Strong on Supply, Group Says

May 25 (Bloomberg) -- Rubber demand from India and China and tight supply after the low-production season will help keep the market strong, the Association of Natural Rubber Producing Countries said.

Demand in China, India and Malaysia, which account for more than 45 percent of global consumption, should stay robust, the association said in its May newsletter.

Natural-rubber imports by China rose 17 percent to 602,000 tons from January to April, and demand, including that of compound rubber, increased 26 percent to 1.05 million tons, according to the association, which represents 94 percent of global output of the commodity. Consumption of natural rubber in India during the first four months jumped 12 percent to 316,000 tons, it said.

Futures in Tokyo plunged 20 percent since reaching a 21- month high of 338.5 yen a kilogram ($3,777 a metric ton) on April 16. The most-active contract gained 1.7 percent last week after dropping to a five-month low of 250.9 yen on May 17. Rubber for October delivery, the most-active contract, fell 2.2 percent to settle at 271 yen on the Tokyo Commodity Exchange.

The International Rubber Consortium Ltd. forecast yesterday that natural rubber prices are likely to stay around current levels, because of increasing demand and a lack of shipments from Thailand.

Tight supplies from the main producing countries after the post-wintering season will support prices, the Association of Natural Rubber Producing Countries said. Trees shed their leaves during the wintering season that runs from February to April, lowering latex output.

The association today maintained the output forecast for its member countries at 9.37 million tons this year, a rise of 6.2 percent from 2009, it said.

The association represents Cambodia, China, India, Malaysia, Indonesia, Papua New Guinea, Philippines, Singapore, Sri Lanka, Thailand and Vietnam.


Rubber Gains as Crude Oil Rally Boosts Demand Amid Tight Supply


May 26 (Bloomberg) -- Rubber advanced as crude oil gained, improving the appeal of the commodity used to make tires, amid speculation of tight supplies from producing countries.

Futures in Tokyo rose as much as 2.8 percent as crude oil rebounded, rising above $70 a barrel after a report showed a drop in gasoline stockpiles in the U.S. and equities recovered from their worst levels. A gain in oil boosts the cost of synthetic rubber made from petroleum.

Rubber also climbed as “supplies from major producers have remained tight,” Takaki Shigemoto, analyst at research and investment company JSC Corp. in Tokyo, said today by phone.

Rubber for October delivery, the most-active contract, climbed as much as 7.6 yen to 278.6 yen per kilogram ($3,092 a metric ton) on the Tokyo Commodity Exchange before trading at 277.5 yen as of 10:37 a.m. local time. The new contract for November delivery was at 274.6 yen after opening at 275 yen.

September-delivery rubber on the Shanghai Futures Exchange rose 1.9 percent to 22,430 yuan ($3,283) a ton.

Demand in China, India and Malaysia, which account for more than 45 percent of global rubber consumption, should stay robust, the Association of Natural Rubber Producing Countries said in its May newsletter. Tight supply after the low-production season will keep the market strong, said the association, which represents 94 percent of global output.

Natural rubber imports by China rose 17 percent to 602,000 tons in the January-April period and demand, including that for compound rubber, rose 26 percent to 1.05 million tons, according to the association. Consumption of natural rubber in India during the first four months rose 12 percent to 316,000 tons, it said.

Rubber markets weak on selling
Kottayam, May 25

The domestic rubber markets turned weak on Tuesday. In spot, the market failed to break above Rs 170 a kg for sheet rubber and the grade moved down to Rs 168 (170) mainly on selling from dealers following the sharp declines on NMCE. The market is experiencing a technical correction and it may regain strength since all the external factors favour a bull run, an analyst said. The trend was mixed.

The June futures declined to Rs 164.51 (168.86), July to Rs 163.98 (168.59), August to Rs 156.01 (160.59) and September to Rs 151.26 (153.75) a kg for RSS 4 on NMCE. The May futures for RSS 3 expired at ¥377.9 (¥377.8) a kg while its June futures slipped to ¥352 (¥357.9), July to ¥332.1 (¥334.3), August to ¥296.2 (¥297.8), September to ¥277.1 (¥281.9) and October to ¥271 (¥277.2) a kg during the day session on Tokyo Commodity Exchange. The June futures moved down further to ¥344.7, July to ¥331.7, August to ¥294, September to ¥274.7 and October to ¥268.5 a kg during the night session.

RSS 3 improved to Rs 177.70 (175.65) a kg at Bangkok. Spot rubber rates Rs/kg were: RSS-4: 168 (170); RSS-5: 166 (167); Ungraded: 163 (165); ISNR 20: 149 (149) and Latex 60 per cent:106(106).