Rubber Set for First Gain in Three Weeks on Weaker Yen, Recovery Signs

Rubber Set for First Gain in Three Weeks on Weaker Yen, Recovery Signs

Rubber increased, heading for the first weekly gain in three weeks, as the yen weakened against the dollar and signs that economic recovery will be sustained boosted the appeal of the commodity used to make tires.

Futures in Tokyo climbed as much as 0.8 percent, gaining for the first time in three days. The price also increased as a drop in the dollar against the euro renewed investor interest in commodities as alternative assets.

The yen traded near a five-week low against the euro before reports that economists said will show German producer prices rose and U.S. consumer confidence improved, sapping demand for safer assets. Asian stocks advanced as a weak yen boosted the outlook for Japan’s exporters.

“Rubber futures draw support from the currency and equity markets,” said Takaki Shigemoto, an analyst at JSC Corp. in Tokyo. “A pessimistic view about the economy is fading as Japan took action to support a recovery.”

February-delivery rubber gained as much as 2.2 yen to 295 yen per kilogram ($3,440 a metric ton) before trading at 294.6 yen on the Tokyo Commodity Exchange at 12:16 p.m.

Yen Weakens

The yen traded at 85.73 per dollar against 85.78 in New York yesterday. Japan sold the currency this week after it climbed to 82.88, the strongest since May 1995, threatening the nation’s export-led economic recovery. Prime Minister Naoto Kan said yesterday his government won’t tolerate “rapid movements” in the yen and is ready to take “decisive measures.”

German producer prices gained 0.3 percent in August from July, when they climbed 0.5 percent, according to a Bloomberg News survey before the report today.

The Thomson Reuters/University of Michigan preliminary index of U.S. consumer sentiment advanced to 70 in September from 68.9 in August, another Bloomberg survey showed before today’s data.

Gains in rubber futures were limited as the nearest-dated contract in Tokyo extended losses amid speculation that physical deliveries may increase when the contract expires.

September-delivery rubber on the Tokyo Commodity Exchange, which will expire on Sept. 24, slumped 1.3 percent to 285.8 yen, extending losses for a third day.

Investors sold the contract amid speculation that as much as 2,570 tons of rubber may be delivered when it expires, Shigemoto said. The volume could more than double from 1,080 tons of physical delivery at the spot contract’s expiry last month, according to Norikazu Takei, a Tocom spokesman.

March-delivery rubber on the Shanghai Futures Exchange added 1.7 percent to 25,590 yuan ($3,804) a ton.

Auctioned prices in Thailand declined as a strengthening local currency made the commodity more expensive for overseas buyers, according to the Rubber Research Institute of Thailand. The price of ribbed smoked sheets dropped 0.5 percent to 104.50 baht ($3.39) per kilogram, it said yesterday.

(bloomberg.com)





Intl meet on rubber to be held in kochi in October
Posted: 16 Sep 2010 09:31 PM PDT
Government officials from 11 rubber-growing Asian countries will discuss the opportunities and challenges facing the rubber industry at a five-day international conference scheduled to take place here from October 4-8.

The conference would be the 33rd assembly of the Association of Natural Rubber Producing Countries (ANRPC) which has Cambodia, India, China, Indonesia, Malaysia, Papua New guinnea, Philippines, Singapore, Sri Lanka, Thailand and Vietnam as its members. The association represents 94 per cent of the total rubber-growing area in the world.

According to the programme schedule, the meet on rubber will be held on October 6 with the theme 'Natural rubber industry in the new decade – Opportunities, Challenges and Working Avenues'.
Apart from discussions on various developments in rubber cultivation, production and consumption, study reports prepared by the ANRPC and the International Rubber Study Group (IRSG), covering emerging aspects of rubber cultivation in the next decade (2011-20), would be presented at the conference.

Along with the assembly, there will be meetings of the executive committee and various technical committees of ANRPC. The venue for both the meetings is the Hotel Le Meridien.

ANRPC was founded in 1970 with Kuala Lumpur (Malaysia) as its headquarters. Vietnam holds the chair of ANRPC currently while India is the vice chair.

(business-standard.com)





Rubber Drops a Second Day on Speculation Physical Deliveries May Increase
Posted: 16 Sep 2010 09:28 PM PDT
By Aya Takada and Supunnabul Suwannakij - Sep 16, 2010 3:16 PM GMT+0700

Rubber dropped for a second day, led by a slump in the nearest-dated contract, amid speculation that physical deliveries may increase when the contract expires next week.

September-delivery rubber on the Tokyo Commodity Exchange, which will expire on Sept. 24, plunged as much as 4.7 percent to 284 yen per kilogram ($3,324 a metric ton), extending yesterday’s 1.8 percent drop, before settling at 289.5 yen.

Investors sold the contract amid speculation that as much as 2,570 tons of rubber may be delivered when it expires, said Takaki Shigemoto, an analyst at JSC Corp. in Tokyo. The volume could more than double from 1,080 tons of physical delivery at the spot contract’s expiry last month, according to Norikazu Takei, a Tocom spokesman.

“The market was weighed down by concern that a larger volume of rubber deliveries may depress prices,” Shigemoto said by phone today.

February-delivery rubber, the most-active contract on the Tokyo exchange, lost as much as 1.3 percent to 292 yen per kilogram before settling at 292.8 yen.

Futures also declined as crude oil dropped, weakening the appeal of natural rubber as an alternative to synthetic products used in tires. Oil fell for a third day in New York after a U.S. government report showed fuel demand declined last week and as Enbridge Energy Partners LP prepared to restart a pipeline after repairs, easing supply concerns.

Crude for October delivery fell as much as 1.3 percent to $75 a barrel in electronic trading on the New York Mercantile Exchange in Asia.

Weak Data

Worse-than-expected economic data in the U.S. renewed concerns that the world’s largest economy may slow, hurting demand for raw materials, Shigemoto said.

Industrial production in the U.S. cooled in August to 0.2 percent after a 0.6 percent gain in July that was smaller than previously estimated, figures from the Federal Reserve showed. A separate report showed manufacturing in the New York region expanded this month at the slowest pace in more than a year.

March-delivery rubber on the Shanghai Futures Exchange dropped 0.5 percent to close at 25,170 yuan ($3,740) a ton.

Auctioned prices in Thailand declined as a strengthening local currency made the commodity more expensive for overseas buyers, according to the Rubber Research Institute of Thailand. Price of ribbed smoked sheets dropped 0.5 percent to 104.50 baht ($3.39) per kilogram, it said.

(bloomberg.com)





Rubber imports to rise 42%
Posted: 16 Sep 2010 09:24 PM PDT
India is likely to witness a 42 per cent rise in natural rubber imports as against the earlier estimate of 70,000 tonnes made by the Rubber Board of India, on the back of lower import duties and sound growth of the automotive sector.

“In all likelihood, imports will be higher than 100,000 tonnes this financial year due to higher demand in the domestic market,” Sajen Peter, the chairman of the Rubber Board said on the sidelines of the Upasi annual general meeting here.

According to data with the Rubber Board, total imports during April-August exceeded its estimate and were around 77,577 tonnes.

The country produced 831,400 tonnes rubber in 2009-2010 and is estimated to produce 7.5 per cent more over last year to 893,000 tonnes in the 2010-11 period.

On domestic pricing, Peter said, “In the last two to three months, there were concerns related to pricing as domestic prices were higher than international prices. However, domestic prices are now at the same level as international prices. In the near term, pricing will remain at this level.”

He, however, said price fluctuation in the domestic futures market remained a concern.

“There have been demands for reducing the upper cap in commodity exchanges to two per cent to check price fluctuation and discourage speculation,” he added. The present upper circuit is four per cent.

(business-standard.com)