Spot rubber improves on short covering

Spot rubber improves on short covering

Kottayam, May 20

Spot rubber flared up on Thursday. The market moved up as speculators took charge to encash the situation inspired by the higher rates in the futures markets mainly TOCOM. Sheet rubber improved to Rs 163 from Rs 160 a kg on fresh buying and short covering. There were no genuine consumer buyers in the market and the prices strengthened on speculative buying, an observer said.

Futures improve

The June futures declined to Rs 164.90 (161.17), July to Rs 164.63 (160.99), August to Rs 157.51 (154.92) and September to Rs 154.50 (150.65) a kg for RSS 4 on the National Multi Commodity Exchange. RSS 3 improved with the May futures rising to ¥373/Rs 192.40 (¥372), June to ¥349.3 (¥345.2) and July to ¥309.5 (¥305) while the August futures weakened to ¥278 (¥280.7), September to ¥267.7 (¥270.8) and October to ¥263.8 (¥267.7) a kg during the day session on the Tokyo Commodity Exchange. RSS 3 increased to Rs 168.04 (163.58) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 163 (160); RSS-5: 159 (156); ungraded: 156 (154); ISNR 20: 141 (139) and latex 60 per cent: 101 (98.50).


Rubber Set for Fifth Weekly Drop as Economic Recovery May Slow

May 21 (Bloomberg) -- Rubber headed for a fifth weekly decline as concern grew European governments may fail to contain the region’s debt crisis, curbing the global economic recovery and reducing raw material demand.

Futures in Tokyo dropped for a second day and lost as much as 3 percent. The market also came under pressure after Japan’s currency rallied to a two-week high against the dollar, cutting the appeal of yen-denominated contracts.

Treasury Secretary Timothy F. Geithner will visit Germany and the U.K. next week “to discuss the economic situation in the region and the measures being taken to restore global confidence and financial stability,” the Treasury Department said yesterday. U.S. stocks plunged yesterday, with the Standard & Poor’s 500 Index losing the most in 13 months, after jobless claims increased and mortgage foreclosures jumped.

“Investors are eager to cut holdings of their risk assets for cash,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone.

Rubber for October delivery, the most-active contract, lost as much as 7.8 yen to 256.0 yen per kilogram ($2,843 a metric ton) before trading at 260.1 yen on the Tokyo Commodity Exchange at 11:02 a.m. local time.

The MSCI Asia Pacific Index declined for a sixth day, losing 1.9 percent. Oil slumped yesterday to the lowest settlement since Sept. 29.

“Investors are avoiding risk in the face of Europe’s sovereign debt crisis,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “With no exit for Europe’s problem in sight, people are afraid a global financial crisis will erupt.”

Thai Turmoil

Losses in rubber futures were limited as political turmoil in Thailand raised concern that supply from the world’s largest exporter may be disrupted.

Thailand’s military ended its mission to disperse anti- government protesters from their central Bangkok base after a May 19 assault left 15 people dead and sparked arson attacks on shopping malls and banks. Troops will now assist police enforcing a 9 p.m. to 5 a.m. curfew in a third of the country through May 22, army commander Daopong Rattansuwan said in a televised briefing late last night.

“As rubber production and shipment operations are mainly done in the nation’s southern area, violence in Bangkok and other cities may not have had a major impact on the physical trade,” Sugata said.

Rubber futures have retreated since reaching a 21-month high of 338.5 yen on April 16 on a seasonal drop in Thai production and amid optimism that global economic recovery will increase demand for the commodity used in tires.

Thai RSS-3 grade rubber for June delivery gained 1.7 percent today to 117.85 baht ($3.64) a kilogram, excluding freight and insurance, the Rubber Research Institute of Thailand said on its website yesterday.

September-delivery rubber on the Shanghai Futures Exchange lost 1.6 percent to 21,415 yuan ($3,137) a ton at 10:06 a.m. local time.