Spot rubber improves on short covering

Spot rubber improves on short covering

Kottayam, May 10

Domestic rubber prices made smart recovery on Monday. In spot, the prices moved up on fresh buying and short covering following the sharp gains in the domestic and international rubber futures. Sheet rubber improved to Rs 153 from Rs 149 a kg but ISNR 20 and latex 60 per cent declined on weak demand. The trend was mixed.

Futures gain

The May futures for RSS 4 flared up to Rs 150.82 (145.02), June to Rs 153.03 (147.15), July to Rs 153.24 (147.35) and August to Rs 151.15 (145.34) a kg on National Multi Commodity Exchange. RSS 3 recovered with May futures rising to ¥340/Rs 163.35 (¥327), June to ¥313 (¥305.4), July to ¥292.4 (¥286.5), August to ¥278.7 (¥273.3), September to ¥269.5 (¥263.1) and October to ¥269.4 (¥262.6) a kg during the day session on Tokyo Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 153 (149); RSS-5: 148.50 (145); ungraded: 146 (143); ISNR 20: 139 (141) and latex 60 per cent: 97 (98).
Rubber Rallies From Five-Month Low on European Bailout Package
Posted: 10 May 2010 06:45 AM PDT
By Jae Hur and Supunnabul Suwannakij
May 10 (Bloomberg) -- Rubber rallied from the lowest price in almost five months on optimism an emergency package by European policy makers will contain a sovereign-debt crisis and maintain economic growth in the region.
Futures on the Tokyo Commodity Exchange rose as much as 2.9 percent, trimming a five-day, 18 percent slump after European policy makers agreed to an emergency lending mechanism worth almost $1 trillion. Rubber also gained as crude oil rose for the first time in five days, reducing the appeal of the rival synthetic product made from petroleum.
“Last week’s panic sell-off in stocks and commodities appears to be easing at the moment with this loan package agreement,” said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co.
Rubber for October delivery, the most-active contract, rose as much as 7.7 yen to 270.3 yen per kilogram ($2,906 a metric ton) before settling at 269.4 yen. The contract dropped to 259.5 yen on May 7, the lowest level since Dec. 16.
European finance ministers put together an unprecedented loan package that may be worth 720 billion euros ($928 billion) for debt-swamped governments in a bid to restore faith in the euro and prevent Greece’s fiscal woes spreading.
The 16 euro governments pledged to make 440 billion euros available, with 60 billion euros more from the EU’s budget, said Spanish Economy Minister Elena Salgado. The International Monetary Fund may provide a further 220 billion euros, she said.
Rally Limited
“Despite this loan package agreement, the rally in risky assets may be limited until investors fully regain confidence,” Kikukawa said.
An increase in supplies from Thailand, the world’s largest exporter, may also cap rubber’s rebound later this week, Kikukawa said. Latex production slows in February to April as growers reduce tapping, during a low-output period known as wintering.
“The EU rescue package for Greece and crude oil’s rally boosted gains on Tocom but rises may be limited on worries over increasing supply,” Chaiwat Muenmee, an analyst at DS Futures Co., said by phone from Bangkok.
The free-on-board price of Thai RSS-3 grade rubber for June-delivery, which excludes freight and insurance, dropped 0.1 percent to 109.65 baht ($3.40) a kilogram, according to the Rubber Institute of Thailand. The price climbed to a record 130.55 baht on April 28.
The decline “was driven by expectations more supply will come onto the market this month,” Chaiwat said.
September-delivery rubber on the Shanghai Futures Exchange gained 1.9 percent to 22,570 yuan ($3,285) a ton. On May 7, it dropped to 22,000 yuan a ton, the lowest level since Feb. 9.
Natural rubber inventories monitored by the Shanghai Futures Exchange fell 2,968 tons to 35,850 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the bourse said May 7.
--Editors: Jarrett Banks, Matthew Oakley.
(businessweek.com)


India rubber futures seen steady; eyes spot demand
Posted: 10 May 2010 06:43 AM PDT
MUMBAI, May 10 (Reuters) - Indian rubber futures, which hit upper circuit on Monday, are likely to trade in a narrow range this week as higher arrivals and production are seen offsetting good spot demand from tyre makers, analysts said.

"In physical markets in Kerala arrivals are gradually rising. Production is also expected to be on higher side," said Shiji Abraham, analyst with JRG Wealth Management.

India's rubber production is likely to rise 7.5 percent to 893,000 tonnes in 2010/11 helping reduce costlier imports, a senior Rubber Board official said last month.

"Tyre markers are increasing purchases due to sharp drop in prices," Shiji said.

Spot price of the most traded RSS-4 rubber (ribbed smoked sheet) has fallen over 11 percent since hitting a record high of 17,000 rupees per 100 kg in Kottayam, Kerala, on April 16, Rubber Board data showed. It rose by 200 rupees to 15,100 rupees on Monday.

The benchmark June contract NMRUM0 on the National Multi-Commodity Exchange (NMCE) provisionally closed up 4 percent at 15,303 rupees per 100 kg.

Tokyo rubber futures rose 2.6 percent on Monday, snapping a five-day falling streak as a weaker yen and a jump in oil prices gingered up investor sentiment, while China was said to have bought rubber last week.

(Reporting by Rajendra Jadhav; Editing by Ramya Venugopal)

(in.reuters.com)

Oil, Copper, Aluminum Jump on European Loan Plan; Rubber Gains
Posted: 10 May 2010 06:42 AM PDT
By Christian Schmollinger
May 10 (Bloomberg) -- Crude oil, copper, aluminum and rubber climbed on speculation a European loan package worth almost $1 trillion and a program of securities purchases will contain sovereign debt risks and bolster economic growth.
Oil soared 2.7 percent to $77.12 a barrel, the biggest intraday increase since April 29, copper surged 2.1 percent to $7,092 per metric ton and aluminum gained 3.3 percent to $2,140 a ton. Rubber increased 1.6 percent to 266.8 yen ($2.88) per kilogram. Gold dropped 0.7 percent to $1,200.40 an ounce.
Investors sought higher-yielding assets as governments of the 16 euro nations agreed to lend as much as 750 billion euros ($962 billion) to countries under attack from speculators. The European Central Bank will intervene in government securities markets, European Union Economic and Monetary Commissioner Olli Rehn said in Brussels. The Reuters/Jefferies CRB Index of 19 raw materials plunged 5.9 percent last week, the most since Dec. 5, 2008, on concerns the Greek debt crisis would spread.
“People have been selling risky assets for the past several weeks because of the Greek debts,” said Tetsu Emori, a commodity fund manager with Astmax Ltd. in Tokyo. “The people that were selling off are now buying back.”
The MSCI Asia Pacific Index of shares advanced 1.2 percent to 119.84 as of 2 p.m. in Tokyo, its first gain in six days. Standard & Poor’s 500 Index futures climbed 2.8 percent, the euro rose 1.3 percent to $1.2925 and the cost of protecting Asia-Pacific bonds from default fell the most in a year.
Oil Surges
Crude oil climbed from a 12-week low and June-delivery traded at $77.16 a barrel, up 2.7 percent, on the New York Mercantile Exchange at 1:05 p.m. in Singapore. Prices will likely return to $80 to $85 once the debt crisis in Greece is resolved, Algerian Energy Minister Chakib Khelil said yesterday.
The contract fell 2.6 percent to $75.11 a barrel on May 7, the lowest close since Feb. 12. Oil plunged 13 percent last week.
Three-month delivery copper on the London Metal Exchange traded at $7,085 a ton, up 2 percent. The metal’s finish of $6,945 a ton on May 7 was the lowest since Feb. 15. Zinc, nickel and lead also advanced.
Rubber rallied from its lowest price in almost five months. Futures for October delivery, the most-active contract, rose as much as 2.6 percent to 269.5 yen per kilogram. Gold fell as much as 1 percent to $1,196.10 an ounce, after climbing to $1,213.07 on May 7, the highest level since Dec. 3.
--With assistance from Li Xiaowei in Shanghai, Jae Hur in Tokyo, and Kyoungwha Kim in Singapore. Editor: James Poole.
(businessweek.com)


Rubber Rallies From Five-Month Low on Europe Emergency Package
Posted: 09 May 2010 10:17 PM PDT
By Jae Hur
May 10 (Bloomberg) -- Rubber rallied from the lowest price in almost five months as European leaders agreed a loan package to prevent Greece’s fiscal problems triggering a broader sovereign-debt crisis.
Futures on the Tokyo Commodity Exchange rose as much as 2.6 percent, trimming a five-day, 18 percent slump after European policy makers agreed to an emergency lending mechanism worth almost $1 trillion. Rubber also gained as crude oil rose for the first time in five days, reducing the appeal of the synthetic product made from petroleum.
“Last week’s panic sell-off in stocks and commodities appear to be easing at the moment with this loan package agreement,” said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co.
Rubber for October delivery, the most-active contract, rose as much as 6.9 yen to 269.5 yen per kilogram ($2,907 a metric ton) before trading at 267.6 yen at 11:10 a.m. in Tokyo. The contract dropped to 259.5 yen on May 7, the lowest level since Dec. 16.
European finance ministers put together an unprecedented loan package that may be worth 720 billion euros ($928 billion) for debt-swamped governments in a bid to restore faith in the euro and prevent Greece’s fiscal woes spreading.
The 16 euro governments pledged to make 440 billion euros available, with 60 billion euros more from the EU’s budget, said Spanish Economy Minister Elena Salgado. The International Monetary Fund may provide a further 220 billion euros, she said.
Rally Limited
“Despite this loan package agreement, the rally in risky assets may be limited until investors fully regain confidence,” Kikukawa said.
An increase in supplies from Thailand, the world’s largest exporter, may also cap rubber’s rebound later this week, Kikukawa said. Latex production slows in February to April as growers reduce tapping, during a low-output period known as wintering.
September-delivery rubber on the Shanghai Futures Exchange gained 1.3 percent to 22,430 yuan ($3,286) a ton. On May 7, it dropped to 22,000 yuan, the lowest level since Feb. 9.
Natural rubber inventories monitored by the Shanghai Futures Exchange fell 2,968 tons to 35,850 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the bourse said May 7.