Rubber Retreats as Falling Crude Oil Prices, Strengthening Yen Cut Appeal

Rubber Retreats as Falling Crude Oil Prices, Strengthening Yen Cut Appeal
Posted: 11 Aug 2010 12:14 AM PDT
Rubber dropped as a decline in crude oil prices and a strengthening Japanese currency reduced the appeal of the commodity used to make tires.

January-delivery rubber in Tokyo fell as much as 1.2 percent to 278.6 yen a kilogram ($3,263 a metric ton) before trading at 281.8 yen at 11:45 a.m. local time. The contract dropped for a third day, the longest losing streak in a month.

The yen gained against all 16 major counterparts after reports today showed U.K. consumer confidence dropped for a third month and Japan’s machine orders rose less than forecast in June.

“A combination of a falling crude oil price and a stronger yen is pressuring the market, lowering rubber prices,” Varut Rungkhum, an analyst at Agro Wealth Ltd., said today by phone from Bangkok.

Oil dropped to a seven-day low yesterday as the U.S. Labor Department said the country’s economy lost momentum heading into the second year of the recovery from the worst recession since World War II. Crude oil for September delivery was unchanged at $80.25 a barrel after dropping as much as 0.6 percent on the New York Mercantile Exchange earlier.

Losses are likely to be limited as prices are supported by forecasts for growth in vehicle sales in China, said Varut.

Auto sales in China, the world’s biggest market, may rise to 16 million this year, a manufacturers’ group said, boosting its forecast from a previous estimate of 15 million. Vehicle sales will be higher than previously expected judging by deliveries in the first half of the year, Beijing-based Dong Yang, vice president of the China Association of Automobile Manufacturers, said in an interview yesterday.

January-delivery rubber in Shanghai gained 0.4 percent to 24,970 yuan ($3,687) a ton.

(bloomberg.com)





Rubber Futures in Tokyo Decline as Much as 1.2% to 278.6 Yen Per Kilogram
Posted: 11 Aug 2010 12:13 AM PDT
Rubber futures in Tokyo declined as much as 1.2 percent to 278.6 yen per kilogram. The January- delivery contract traded at 280 yen at 9:03 a.m.

(bloomberg.com)





Rubber exporters enjoy windfall
Posted: 11 Aug 2010 12:12 AM PDT
HCM CITY — The country exported 324,000 tonnes of rubber worth US$893 million in the first seven months of the year, according to the Viet Nam Rubber Association.

The figure represented a 3.4 per cent decrease in volume but 85 per cent increase in revenue since rubber prices rose last year, the association's general secretary, Tran Thuy Hoa, said.

The average export price in the first seven months was $2,744 a tonne, 92.7 per cent higher than in the same period last year, according to the VRA.

Global prices increased between January and April due to a recovery in demand from many industries and a fall in supply, she said, though prices edged down in May and June.

Global consumption of natural rubber is expected to be 10.43 million tonnes this year, 8 per cent higher than last, she said.
With output unlikely to rise significantly this year, prices are forecast to rise again in the remaining months of the year, she said. They are hovering at $3,038 a tonne now.

China is the largest buyer of Vietnamese rubber, accounting for two-thirds of the country's total rubber exports. Of last year's exports of $1.2 billion, $800 million was to China.

Chinese market

Of Viet Nam's 216 exporters, 125 trade with China, mostly across the border.

Thus, when authorities there curtailed rubber imports in April, Vietnamese exports plunged for the next two months, Hoa said, pulling down overall exports inordinately.

In June, exports to China resumed after authorities loosened the ban.

To avoid a similar scenario in future and depending too much on that market, rubber exporters have begun to explore other markets, she said.

As a result, exports to several markets like Malaysia, Taiwan, Germany and Russia have shot up this year.
The EU is considered a lucrative market though very difficult to penetrate since it requires high quality while most Vietnamese rubber products are of medium quality. — VNS

(vietnamnews.vnagency.com.vn)





Rubber import likely to surge on high domestic prices
Posted: 11 Aug 2010 12:11 AM PDT
Mumbai: India is likely to import 110,000 tonne of natural rubber in 2010-11 as record-high local prices forced tyre makers to source more raw material from abroad, a Rubber Board official said.

This is higher than the board's April estimate of 70,000 tonne of imports for the year, but lower than 2009-10's imports of 1,71,000 tonne, according to Rubber Board data.

“Going by the current trend, we are expecting imports of over 110,000 tonne this year,” a senior Rubber Board official, who declined to be named, said on Tuesday.

“The world's fourth-biggest rubber producer has imported 57,872 tonne of natural rubber between April 1 and August 7,” the official said.

Local rubber prices have nearly doubled in the past year on a drop in output due to drought coupled with rising demand from from tyre-makers struggling to cope with a boom in the auto industry.

India usually imports rubber from Thailand, Malaysia and Indonesia.

The Board had in April estimated imports for the year at 70,000 tonne, when the spot rubber price was Rs 16,000 ($345) per 100 kg.

The price last week hit a record high of Rs 18,600, widening the difference between Indian and global prices.

Industry officials, however, said the imports in 2010-11 would be even higher than 110,000 tonne as rubber is much cheaper in the overseas markets and domestic demand is also robust.

“International prices are Rs 30-35 (a kg) lower than domestic prices. Imported rubber is cheaper despite a 20% import duty,” George Valy, president of The Indian Rubber Dealers Federation, said.

“Imports would be very high if government cuts import duty. They may rise to 200,000 tonne,” he added.

The Rubber Board estimates output in India to rise by 7.5% to 893,000 tonne in 2010-11 and consumption by 5% to 978,000 tonne.

Tokyo's benchmark rubber contract slipped a little on Tuesday as a weak oil price triggered stop-loss selling, but a pause in the yen's rise against the dollar helped limit losses, dealers said.

(financialexpress.com)





TOCOM To Halve Rubber Delivery Unit To 5 Tonnes To Meet Needs Of Smaller Commercial
Posted: 11 Aug 2010 12:10 AM PDT
Tokyo Commodity Exchange, Inc. (“TOCOM” or the "Exchange") today announced that the Exchange would halve the delivery unit of Rubber futures to 5 tonnes in order to enhance the convenience of the market. TOCOM received an approval for this change from the Minister of Economy, Trade and Industry today and will apply this change from the March 2011 contract that will start trading on September 27, 2010.

Currently on the TOCOM Rubber futures market, the delivery unit is 10 tonnes while the contract unit is 5 tonnes. In the spot market, however, the delivery unit is generally smaller, at less than 10 tonnes. Therefore a number of commercial players have requested that the Exchange adjusts its delivery rules to match spot market practices.

TOCOM decided to decrease the delivery unit from 10 tonnes to 5 tonnes in order to meet the needs of commercials and improve the convenience of the market. Today the Exchange received an approval from the Minister of Economy, Trade and Industry to execute the necessary amendments to its Market Rules, which prescribe the delivery unit of each futures contract. Changes in the delivery unit of rubber futures will be applied from September 27, 2010 onward when the March 2011 contract will commence trading.

TOCOM will continue to make efforts to improve the credibility and convenience of its market.

[Summary of Rubber Futures Contract Specifications]

Contract Months Up to February 2011 Contract From March 2011 Contract onward

Type of Trade Physically Delivered Futures Transaction

Standard Ribbed Smoked Sheet (RSS) No.3

Contract Unit 5,000 kg (5 tonnes) / contract

Delivery Unit 10,000 kg (10 tonnes) 5,000 kg (5 tonnes)
(Delivery unit = 2 contract units) (Delivery unit = 1 contract unit)

(mondovisione.com)





Rise in spot rubber prices
Posted: 11 Aug 2010 12:05 AM PDT
On Tuesday (10 August 2010), the spot rubber prices rose mainly on supply concerns. Sheet rubber increased to Rs 186 from Rs 185 per kg, though there were no fresh enquiries from major consuming industries.

The August futures for RSS 4 rose to Rs 190.75 (189.57), September to Rs 174.65 (174.55), October to Rs 165.10 (164.93) and November to Rs 162.50 (162.29) per kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 186 (185); RSS-5: 177 (175); ungraded: 166 (166); ISNR 20: 157 (157) and latex 60 per cent: 109.50 (107.50).

(indiainfoline.com)