Spot rubber improves on covering purchases

Spot rubber improves on covering purchases


Kottayam, July 24

Spot rubber prices improved on Saturday. The market gained strength again, catalysed by the bullish closing on the National Multi Commodity Exchange. Sheet rubber firmed up to Rs 182 from Rs 181 a kg on covering purchases. The trend was mixed as ISNR 20 finished flat and ungraded rubber slipped on low demand.

Futures gain

The August futures improved to Rs 179.05 (176.67), September to Rs 165.80 (162.91), October to Rs 159.90 (158.27) and November to Rs 159.40 (158.01) a kg for RSS 4 on the National Multi Commodity Exchange. The total volume was 3,456 lots and turnover Rs 60.70 crore. The total open interest in all series was 5,904.

Spot rates were (Rs/kg): RSS-4: 182 (181); RSS-5: 177 (176.50); ungraded: 167 (170); ISNR 20: 160 (160) and latex 60 per cent: 123 (123).




Rubber Climbs From Six-Week Low as Rally in Equities Boosts Confidence

Rubber recovered from a six-week low as the nearby contract surged amid speculation that low stockpiles in Japan may make physical delivery difficult at its expiry on July 26.

Futures in Tokyo climbed as much as 3.5 percent after slumping yesterday to the lowest level since June 9. The price also increased as a rally in global stocks boosted investor confidence in economic growth.

The July-delivery contract surged by 11.2 percent after data showed this week that natural-rubber stockpiles monitored by the Tokyo Commodity Exchange dropped by 29 percent to 1,341 tons as of July 10. It was the lowest level since at least 2001, according to exchange spokesman Seiki Ichimura.

“Reduced inventories spurred a short-covering rally, leading to a jump in the price of the July contract,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone. Speculators with short, or sell, positions in the nearby contract must buy them back by the expiry date, unless they can deliver the raw material.

December-delivery rubber increased as much as 8.9 yen to 266.2 yen per kilogram ($3,059 a metric ton) before settling at 265.6 yen on the Tokyo Commodity Exchange.

July-delivery rubber surged 40 yen to 397.2 yen. In April, the nearby contract jumped to 455.4 yen, the highest-ever expiry price, exchange spokesman Ichimura said.

Equities Gain

Rubber futures also advanced as Asian stocks increased after U.S. companies from AT&T Inc. to United Parcel Service Inc. raised profit forecasts. The yen fell against all of its major counterparts on speculation Japanese policy makers may act to weaken the currency to support economic growth.

The MSCI Asia Pacific Index gained 1.7 percent to 117.55 at 4:29 p.m. Tokyo time, extending its increase this week. Asian equities may “surprise on the upside” in the second half of the year because the global economy is likely to avoid a recession, according to Nomura Asset Management Co.

Economic growth in emerging markets including China will counter any slowdown in the U.S. and Europe, helping to boost Asian equities, said Graham Muirhead, Singapore-based head of investment for the Asia-Pacific region outside Japan at Nomura Asset. His firm, which holds $12 billion in Asian equities, is a unit of Nomura Holdings Inc., Japan’s largest brokerage.

November-delivery rubber on the Shanghai Futures Exchange gained 2.8 percent to 22,220 yuan ($3,278) a ton.