Rubber Advances on Tight Supply From Thailand; Stronger Yen Limits Gains

Rubber Advances on Tight Supply From Thailand; Stronger Yen Limits Gains
Posted: 06 Oct 2010 11:57 PM PDT
Rubber advanced for a third day as wet weather disrupted tapping in Thailand, limiting supply from the world’s largest producer and exporter.

The March-delivery contract climbed as much as 0.6 percent to 323.5 yen per kilogram ($3,901 a metric ton) before trading at 322.5 yen on the Tokyo Commodity Exchange at 11:54 a.m. The price rose to 324.1 yen yesterday, the highest level for the most-active contract since April 26.

Shippers in Thailand have raised offers for RSS-3 grade rubber for November shipment to around $3.70 a kilogram, from $3.60 at the end of last week, said Kazuhiko Saito, an analyst at commodity broker Fujitomi Co. in Tokyo.

“Shipments from Thailand slowed as heavy rain constrained latex output in the nation’s main producing areas,” Saito said today by phone.

Gains in futures were limited after Japan’s currency climbed to a 15-year high against the dollar, weakening the appeal of yen-denominated contracts, he said.

The dollar was at 82.94 yen at 11:42 a.m. in Tokyo after sinking to 82.77 yesterday, the weakest level since May 1995 and lower than the rate on Sept. 15, when Japan intervened in the currency market for the first time since 2004.

The dollar came under pressure amid growing expectations that the Federal Reserve will expand credit-easing steps to sustain the U.S. recovery. The yen also advanced on prospects that Japan will avoid currency-market intervention before this week’s meeting of finance ministers and central bankers from the Group of Seven industrialized nations.

Low Risk Appetite

“Investors’ risk appetite isn’t strong before the release of U.S. jobs data, as they are bracing for weak numbers,” Saito at Fujitomi said.

U.S. initial jobless claims likely increased by 2,000 to 455,000 in the week ended Oct. 2, according to a Bloomberg News survey of economists before the data is released today. The unemployment rate climbed to 9.7 percent in September from 9.6 percent in August, according to a separate survey.

As the stimulus-led recovery failed to create jobs, companies in the U.S. unexpectedly cut payroll by 39,000 in September, according to figures from ADP Employment. The median of a Bloomberg News survey of 37 economists projected an increase of 20,000 jobs.

The auctioned price of ribbed smoked sheets in Thailand grew 1.3 percent to 105.6 baht ($3.52), the Rubber Research Institute of Thailand said yesterday on its website.

The Shanghai market is closed for National Day holidays and will resume trade tomorrow. Natural-rubber inventories expanded 4,680 tons to 31,580 tons, based on a survey of 10 warehouses, the exchange said Sept. 30.

(bloomberg.com)





Rubber May Advance to Highest Since 2008 on 'Momentum': Technical Analysis
Posted: 06 Oct 2010 11:55 PM PDT
Rubber futures on the Tokyo Commodity Exchange may climb to the highest level since July 2008 because of “bullish momentum,” according to technical analysis from Singapore-based broker Phillip Futures Pte Ltd.

The moving average convergence/divergence indicator crossed above the shorter-dated signal line on Sept. 22, pointing to higher prices, said Ker Chung Yang, analyst at Phillip Futures.

The most-active contract, which increased 17 percent this year, may test resistance at 332 yen per kilogram ($4,006 per metric ton) next week, Ker said in e-mail yesterday. “It’s possible for TOCOM rubber to extend gains,” he said. The price reached 324.1 yen yesterday, the highest intraday level since April, and traded at 323.6 yen today.

Rubber, used to make tires and gloves, may be bolstered by strengthening crude oil prices and increasing demand for tires after U.S. auto sales in September rose to a seasonally adjusted annual rate of 11.8 million, compared with 9.4 million a year earlier, according to a Phillip Futures’ note dated Oct. 4. Demand in China, the world’s biggest consumer, may outstrip supply in the short term because of economic growth, it said.

The MACD indicator is derived by subtracting a 26-day exponential moving average from a 12-day average. A second measure, called the signal line, uses a nine-day moving average of the MACD indicator. In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.

(bloomberg.com)





Ceylon raw rubber prices fluctuate on Jodia Bazar
Posted: 06 Oct 2010 11:52 PM PDT
KARACHI (October 07, 2010) : The trading in Ceylon raw rubber moved both ways on Jodia Bazar here on Wednesday. The following variations were noted.

CEYLON RAW RUBBER (Per lb): Merryrub (Equivalent to RSS3) edged up by Rs 10 to Rs 160, RSSV closed higher by Rs 10 to Rs 160, Merryrub (Equivalent to Crape) went down by Rs 25 to Rs 175 and Pale Crape TPC3 moved lower by Rs 20 to Rs 180.

LATEX: Merrytex (28 kg) closed higher by Rs 125 to Rs 1,075, Semnan Tex moved upward by Rs 125 to Rs 1075 and Thai (GT) ended up by Rs 125 to Rs 1,075.

(brecorder.com)





Spot rubber recovers
Posted: 06 Oct 2010 11:50 PM PDT
On Wednesday (06 October 2010), the spot rubber prices recovered due to short coverings. Moderate gains on the National Multi Commodity Exchange and the predictions regarding continuous rains till the weekend have triggered short covering in major grades, and the prices moved up sharply even amidst low volumes. Sheet rubber increased to Rs 174 from Rs 172 per kg mainly on covering purchases.

The October futures for RSS 4 rose to Rs 178.80 (175.91), November to Rs 180.90 (177.85), December to Rs 183.75 (180.80) and January to Rs 187.18 (183.75) per kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 174 (172); RSS-5: 168 (167); ungraded: 164.50 (163); ISNR 20: 169 (168) and latex 60 per cent: 116 (116).

(indiainfoline.com)


Low priority for rubber in carbon trade irks planters
Domestic market sought to encourage afforestation.
M. R. Subramani

Chennai, Oct 7

The clean development mechanism or the system that encourages either preventing emitting of carbon di-oxide into the atmosphere or removing it from there has seen 2,141 projects registered for carbon credits till August last year. But the system seems to accord the lowest priority for afforestation and reforestation (A/R) since only five projects have been registered for carbon credits until now.

It is here that the plantation industry, especially rubber growers, are feeling aggrieved. Plantation crops provide an array of ecosystem services such as protecting the top soil from erosion, improving the water cycle and carbon sequestration. But it does not enjoy the benefits of this since A/R is not among preferred in the 15 sectors that are eligible for carbon trading.

In a technical paper presented on “Climate change and plantation crops” at the United Planters' Association of Southern India 117th annual conference, Dr James Jacob, Director of Rubber Research Institute of India, said that the procedure for getting A/R credits is cumbersome that it is practically impossible to get certified emission reduction (CER) credits for plantations in the country.

“There are no major buyers for A/R credits except the World bank and it is rather symbolic in nature,” said Dr Jacob. “Sectors such as energy or manufacturing are so powerful that they hold huge CER potential and therefore, these sectors are naturally preferred in global carbon markets,” he said.

In fact, the CDM takes into account of things after December 31, 1989. All the plantations are older than that and, therefore, they are not eligible for the credits.

The other problem is that the plantation sector comes under the Commerce Ministry that has not been taken on board by the Ministry of Environment and Forests, the nodal ministry dealing with climate change negotiations. “Therefore, the interest of the plantation sector are not considered in the cap and trade negotiations,” Dr Jacob said, adding that the plantation sector should explore how best the carbon credit potential of the industry could be protected.

One of the ways suggested to tap the potential of the plantation industry in carbon credit is for the country have its own domestic or regional mechanism by including A/R.

This is because there are no serious buyers for A/R credits. “They (A/R) credits remain unsold as a result,” Dr Jacob said.

With the future of Kyoto Protocol being uncertain, such a domestic system will help.

The plantation industry feels the domestic mechanism is also need since even if the carbon credit trade continues after 2012, the sector will continue to be treated unfairly.



Spot rubber rules steady
Aravindan

Kottayam, Oct 7

Spot rubber was almost steady on Thursday. According to observers, certain tyre companies were buyers of n RSS 4 as sustained and heavy rain continued to dominate the market mood. A leading manufacturer bought the grade even at Rs 175 a kg on early trades but the declines in domestic futures kept the sentiments under pressure during closing hours.

Sheet rubber closed unchanged at Rs 174 a kg in the main marketing centres. The grade improved to Rs 173.5 (172.5) a kg both at Kottayam and Kochi according to Rubber Board. The trend was partially mixed.

Futures decline

RSS 4 declined with the October series slipping to Rs 177.2 (178.96), November to Rs 178.75 (180.85), December to Rs 181.7 (183.7) and January to Rs 185 (187) a kg on the National Multi Commodity Exchange. The volumes totalled 4,478 lots, and open interest 4,498 lots. The turnover was Rs 80.77 crore.

RSS 3 improved marginally at its October series to ¥309.7 (Rs 166.21) from ¥308.9 a kg during the day session and then to ¥312 (Rs 167.44) during the night session on Tokyo Commodity Exchange. RSS 3 (spot) firmed up further to Rs 165.29 (164.19) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 174 (174); RSS-5: 168 (168); ungraded: 164.5 (164.5); ISNR 20: 170 (169) and latex 60 per cent: 116 (116).