Kottayam, April 30
The rubber market continued its downward journey on Friday. In spot, the prices fell discounting all the favourable factors lacking genuine buyers on any grade to stabilise the market mood.
Heavy losses in the May futures on TOCOM catalysed the domestic bear spell and certain dealers were panic sellers on sheet rubber. The grade moved down to Rs 162 from Rs 167 a kg on buyer resistance. It is rumoured that the tyre manufacturers were buyers in the futures but according to an analyst, RSS 4 is expected to fall further in the short term.
Futures weak
The May futures moved down to Rs 157.48 (164.04), June to Rs 160.12 (166.79), July to Rs 158.53 (165.13) and August to Rs 156.40 (162.82) a kg for RSS 4 on National Multi Commodity Exchange.
RSS 3 declined sharply with May futures slipping to ¥395/Rs 185.51 (¥428), June to ¥350.2 (¥362), July to ¥320.5 (¥335) and August to a kg during the day session on Tokyo Commodity Exchange. RSS 3 slipped to Rs 175.53 (175.85) a kg on Singapore Commodity Exchange (SICOM). RSS 3 (spot) weakened to Rs 178.91 (179.20) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 162 (167); RSS-5: 160 (165); ungraded: 158 (162.50); ISNR 20: 156 (159) and latex 60 per cent: 105 (106).
Rubber Drops as Supply Improves, Investors Sell Before Holiday
April 30 (Bloomberg) -- Rubber headed for its worst monthly performance since September as most investors unwound positions before holidays in Japan next week amid speculation that supply will improve as the annual low-output season ends.
Futures in Tokyo fell as much as 1.3 percent to 301.7 yen a kilogram ($3,211 a metric ton) after rising as much as 1.3 percent earlier. The most-active contract dropped for a third day, extending April’s loss to 2.1 percent.
“There will be position-squaring by investors ahead of the long holidays,” said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co.
The Tokyo rubber futures market, which was closed yesterday for a public holiday, will be closed from May 3 to May 5 for the Golden Week holiday and resume trading on May 6.
Supply in key producing countries is expected to improve as the wintering season, when trees shed leaves and latex output slows, typically finishes at the end of April. “Supply will slowly improve,” said Felix Yeo, a trading manager at the Singapore unit of Marubeni Corp.
October-delivery rubber, the most-active contract on the Tokyo Commodity Exchange, declined 1.3 percent to 301.9 yen per kilogram as of 12:55 p.m. Singapore time.
Rubber futures have gained 9.5 percent this year and reached a 21-month high of 338.5 yen on April 16 as the global economy recovered from the worst postwar recession, boosting raw material demand. The market was also supported by a seasonal decrease in supply from Thailand, Malaysia and Indonesia, the three biggest producers.
The free-on-board price, which excludes freight and insurance, of Thai RSS-3 grade rubber for May delivery remained unchanged at 129.55 baht ($4.01) per kilogram today, according to the Rubber Institute of Thailand. It touched a record 130.55 baht on April 28.
September-delivery rubber on the Shanghai Futures Exchange declined 0.6 percent to 23,295 yuan ($3,412) a ton.
High prices:Workers at a rubber sapling nursery near Wadakkumchery in Kerala. The country's rubber sector is booming in spite of labour shortage. Farmers have limited options of increasing yield as high prices of rubber have ensured that they tap their trees to the maximum. Consumers, who kept away from the market in the past couple of months due to high prices and low arrivals, are likely to re-enter the market and prices are expected to shoot up further.
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