Spot rubber declines on buyer resistance

Spot rubber declines on buyer resistance
Aravindan

Kottayam, Aug 9

Spot rubber declined further on Monday. According to market circles, the prices slipped mainly on buyer resistance. Sheet rubber weakened to Rs 185 from Rs 186 a kg, while the trend was mixed as latex 60 per cent ended higher on supply concerns and ungraded rubber and ISNR-20 finished flat amidst scattered transactions. The Board's rate was quoted slightly lower at Rs 184 (185) a kg for RSS 4.

Futures firm

Rubber futures firmed up on the National Multi-Commodity Exchange. The September futures witnessed a high of Rs 174.77 and a low of Rs 171.87 a kg during the session. The Tokyo rubber futures eased on Monday, hit by the yen's rise towards a 15-year high against the dollar. The August series improved to Rs 189.66 (187.49), September to Rs 174.50 (172.68), October to Rs 164.75 (163.32) and November to Rs 162.16 (160.70) a kg for RSS 4 on the NMCE. The volumes totalled 5376 lots and turnover 94.76 crores. The total open interest in all series was 4836 lots. The August futures for RSS 3 moved up marginally to ¥321.5/Rs 173.11 (¥320.6) during the day session and to ¥323.5 (Rs 174.19) a kg during the night session on the Tokyo Commodity Exchange . The grade (spot) slipped to Rs 150.38 (Rs 150.79) a kg at Bangkok.

Spot rates were (Rs/kg): 185 (186); RSS-5: 175 (177); ungraded: 166 (166); ISNR 20: 157 (157) and latex 60 per cent: 107.50 (106).



TOCOM to allow smaller rubber delivery lots from March
Posted: 09 Aug 2010 04:44 AM PDT
TOKYO Aug 9 (Reuters) - The Tokyo Commodity Exchange said on Monday it will change the unit of deliveries of rubber futures contracts to 50,000 tonnes from the current 100,000 tonnes from the March 2011 contract to allow end-users more flexibility.

The move is in response to users asking for conformity with physical rubber deliveries, which are done in units smaller than 100,000 tonnes, TOCOM said.

The measure will apply from the contract expiring in March 2011.

"The step will allow traders to more flexibly adjust their volumes and can enhance trading over the long term, which will also help smooth price distortions caused by difficulties in deliveries because of the size," said a dealer at a Japanese commodity brokerage.

TOCOM is Japan's biggest commodity exchange and lists oil, gold, rubber and other industrial commodity futures. It has been struggling to boost trading volumes and has been taking a variety of measures to address the issue.

(reuters.com)





Rubber to Hover Near Current Level on Tight Supply, More Demand, IRCO Says
Posted: 08 Aug 2010 10:41 PM PDT
Natural rubber prices are likely to hover near the current level for the next two months because of tight supply and increasing demand, according to the International Rubber Consortium Ltd.

The average physical price in Thailand, Indonesia and Malaysia, the top three producers, may be about $3 per kilogram in the next one to two months, steady compared with the average so far this year, said Abdul Rasip Latiff, chief executive officer of the Bangkok-based group. Rasip spoke in an interview in Phuket after meeting with the International Tripartite Rubber Council, which represents growers and exporters in the three countries, on Aug. 6.

Rubber futures recovered from a five-month low of 250.9 yen a kilogram ($2,916 a metric ton) on May 17 due to optimism that economic expansion and low stockpiles in China and Japan would drive consumption. January-delivery rubber fell 0.3 percent to 281.3 yen on the Tokyo Commodity Exchange at 10:19 a.m.

“Rains have been more than normal in Thailand, disrupting tapping and affecting supply. Malaysia’s situation has been similar to southern Thailand,” Rasip said. Thailand’s southern provinces produce 68 percent of its output.

“Wintering season will soon start in Indonesia. Trees will shed leaves and less latex will be coming out. Production will be 20-30 percent lower than normal,” Rasip added, without giving a production forecast.

Thailand’s rubber production this year is projected to total 3.2 million tons, steady with last year, according to the Association of Natural Rubber Producing Countries. Indonesia may produce 2.6 million tons, from 2.4 million tons last year, and Malaysia’s output may amount to 1 million tons, from 857,000 tons last year, the association said. The three countries account for about 70 percent of the world’s output.

China Imports

China’s natural rubber imports are estimated to grow 5 percent this year to 1.67 million tons, the association said in a July bulletin.

Import demand from China, the largest consumer, is growing and car sales have expanded. China’s passenger-car sales in July rose 15.4 percent from a year earlier to 822,300 units, the China Automotive Technology & Research Center said Aug. 2. The nation’s automobile sales rose 17 percent to 1.06 million units, according to the center.

(bloomberg.com)





Rubber Futures May Reach Two-Year High on Supply Shortage, Von Bundit Says
Posted: 08 Aug 2010 10:41 PM PDT
Rubber futures may climb to a 25- month high as supply in Thailand, the largest exporter, lags behind growing demand because of bad weather, according to Von Bundit Co., the country’s biggest producer.

“Global production will continue to be below demand until 2012 and that will support prices to move in a range of 250 to 350 yen per kilogram between now and 2011,” Managing Director Pongsak Kerdvongbundit said in an interview in Phuket.

Futures have recovered 12 percent from a five-month low of 250.9 yen a kilogram ($2,934 a metric ton) on May 17 on optimism that economic expansion and low stockpiles in China and Japan would drive consumption. January-delivery rubber was little changed at 282 yen on the Tokyo Commodity Exchange at 1:34 p.m.

“Demand continues to grow, but supplies are inadequate because of erratic weather,” Pongsak said. “We don’t have any rubber available and neither do our peers.”

The free-on-board price of the benchmark Thai RSS-3 grade rubber for September-delivery, which excludes freight and insurance, stood at 104.50 baht ($3.26) a kilogram on Aug. 6, the Rubber Institute of Thailand said. The price reached a record 130.55 baht on April 27.

Physical rubber prices are likely to hover near current levels at $3 a kilogram for the next two months because of tight supply and increasing demand, according to the Bangkok-based International Rubber Consortium Ltd., a producer group formed to address oversupply and low prices.

Low Stockpiles

Rubber stockpiles continue to remain below normal levels, said Abdul Rasip Latiff, chief executive officer of the group. “We’ll then see buyers building up inventories,” said Rasip. Global stocks are near 1.4 million tons, below a normal level of around 1.6 million to 1.8 million tons for about eight-10 weeks of consumption, he said.

China’s natural rubber imports are estimated to grow 5 percent this year to 1.67 million tons, the Association of Natural Rubber Producing Countries said in a July bulletin.

Demand from China, the largest consumer, is growing as car sales have expanded. China’s passenger-car sales in July rose 15.4 percent from a year earlier to 822,300 units, the China Automotive Technology & Research Center said Aug. 2. The nation’s automobile sales rose 17 percent to 1.06 million units, according to the center.

Thai Output

Natural rubber output in Thailand may decline by as much as 5 percent to 3 million tons this year as wintering lasted longer than expected and persistent rain amid the La Nina weather pattern disrupted tapping, said Pongsak.

In 2009, Thailand produced 3.2 million tons of natural rubber, according to the Association of Natural Rubber Producing Countries, which forecast Thai output will be steady this year.

Output may increase around December and January, said Pongsak. “Despite this, prices are unlikely to fall as buyers will make purchases ahead of the wintering season,” which usually start in February, he added.

Thai exports are expected to decrease as the government will raise levies for rubber exports, promoting rubber processing and boosting local consumption, Pongsak said.

The Thai government last week approved a higher levy on rubber exports, in effect from Oct. 1. The new levy ranges from 0.9 baht ($0.03) to 5 baht a kilogram based on a sliding scale of free-on-board prices, according to Supachai Phosu, deputy minister of agriculture and cooperatives. The existing levy ranges from 0.9 baht to 1.4 baht.

“Purchases of contracts expiring before October are expected to increase,” Pongsak said.

(bloomberg.com)





Rubber Advances on Speculation Dwindling China Stockpiles to Prompt Buying
Posted: 08 Aug 2010 10:40 PM PDT
Rubber advanced for a third day in Tokyo, tracking gains in Shanghai, as low inventory levels in China boosted optimism that the biggest consuming nation will need to replenish stockpiles.

Futures in Tokyo gained as much as 0.5 percent to 283.5 yen a kilogram ($3,255 a metric ton), reversing an earlier 1.5 percent decline. The most-active contract advanced 3.5 percent last week, the biggest increase since the week ended June 25.

“Rubber in Tokyo is tracking a rally on the Shanghai market after a report showed stockpiles remain low,” Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co. said by phone from Bangkok.

Natural rubber stocks were 20,208 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said Aug. 6. Inventories have plunged 87 percent from this year’s high of 151,832 tons on Jan. 21, according to data compiled by Bloomberg.

January-delivery rubber climbed 0.4 percent to 283.22 yen on the Tokyo Commodity Exchange as of 12:20 p.m. local time.

On the Shanghai Futures Exchange, January-delivery rubber gained as much as 1 percent to 24,945 yuan ($3,687) a ton and traded at 24,804 yuan by the 11:30 a.m. local-time break.

Natural rubber prices are likely to hover near current levels for the next two months because of tight supply and increasing demand, according to the International Rubber Consortium Ltd.

The average physical price in Thailand, Indonesia and Malaysia, the top three producers, may stay near $3 per kilogram over the next one to two months, Abdul Rasip Latiff, chief executive officer of the Bangkok-based group, said in an interview.

The free-on-board price of the benchmark Thai RSS-3 grade rubber for September-delivery, which excludes freight and insurance, dropped 0.2 percent to 104.50 baht ($3.28) a kilogram on Aug. 6, according to the Rubber Institute of Thailand.

(bloomberg.com)





Decline in spot rubber prices
Posted: 08 Aug 2010 10:38 PM PDT
On Saturday (07 August 2010), the spot rubber prices declined following the news that Government was considering a proposal to allow imports of limited quantity of NR at lower duty. Sheet rubber decreased to Rs 186 from Rs 189 per kg mainly in buyer resistance.

The August futures for RSS 4 declined to Rs 187.30 (190.42), September to Rs 172.56 (176.80), October to Rs 163.20 (167.05) and November to Rs 160.70 (164.50) a kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 186 (189); RSS-5: 177 (179.50); ungraded: 166 (169); ISNR 20: 157 (159) and latex 60 per cent: 106 (107).

(indiainfoline.com)