Tokyo futures hit new high on firm oil, supply

Tokyo futures hit new high on firm oil, supply
Posted: 10 Feb 2011 01:24 AM PST
BANGKOK, Feb 10 - Tokyo rubber futures jumped to a new record on Thursday, on the back of speculative buying due to concerns of tight supply and firmer oil prices.

* The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for July delivery rose 9.9 yen to settle at 513.9 yen per kg. It rose as high as 515.0 yen per kg, its highest ever.

* U.S. crude oil futures inched higher on Thursday amid ongoing concerns about unrest in Egypt, while a weaker dollar helped Brent rise above $102 a barrel. [ID:nL3E7DA02K]

* Dealers said TOCOM prices were expected to rise further on Friday on the back of strong demand and thin supplies as dry weather cuts supply in producing countries.

* TOCOM rubber was expected to rise further to test new resistance of 520 yen per kg, with the 500 level being seen as a strong psychological support level, they said. (Reporting by Apornrath Phoonphongphiphat; Editing by Jason Szep)

(Source: http://asia.news.yahoo.com/rtrs/20110210/tap-markets-asia-rubber-c3bb44c.html)






Rubber at record high for second day
Posted: 09 Feb 2011 11:03 PM PST
RUBBER advanced to an all-time high for a second day amid speculation record prices will not deter tiremakers from purchasing the raw material used in tires as auto sales continue to climb.
The July-delivery contract jumped as much as 2.2 per cent to 515 yen a kilogram ($6,240 a metric ton) before trading at 514.5 yen on the Tokyo Commodity Exchange at 12:02 p.m.
Sumitomo Rubber Industries Ltd., Japan’s second-largest tire maker, raised its earnings estimate yesterday, citing strong sales of snow tires in the domestic market and expanding demand overseas. Bridgestone Corp., the world’s largest manufacturer, yesterday announced increases of 8 percent to 15 per cent in product prices for the Japanese market from June 1.
“Tire producers may have no other options but to increase rubber purchases, regardless of record prices, as they have to raise output to meet expanding demand,” Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co., said today.

Rubber futures have gained 24 per cent this year, extending last year’s 50 per cent rally, as rising car sales led by China and India boosted demand for tires. Shipments from Thailand, Indonesia and Malaysia, the top growers representing 70 percent of global supply, were curbed by heavy rains.
Nissan Motor Co., Japan’s second-largest automaker, raised its profit forecast yesterday after new models and increasing sales in North America and Asia helped the company offset the impact of the strong yen. The company expects to sell 4.165 million vehicles in the year ending March 31, up from an earlier forecast of 4.1 million.
Car-sales growth in China, the world’s biggest auto market, will be around 10 per cent to 15 per cent this year, according to the China Association of Automobile Manufacturers. Total auto sales, which include cars, trucks and buses, jumped 32 percent last year to 18.06 million, the group said.
Natural-rubber consumption in China may rise 9 percent to 3.6 million tons this year, while rubber use in India may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries.
In Shanghai, May-delivery rubber gained as much as 2.6 percent to 43,290 yuan ($6,573) a metric ton before trading at 43,100 yuan at 10:38 a.m. local time. The price climbed to a record 43,500 yuan yesterday.
The physical price of natural rubber in Thailand, the world’s largest exporter, extended gains to an all-time high of 187.80 baht ($6.12) per kilogram yesterday, boosted by strong demand from local and overseas buyers amid concerns over supply shortages, the Rubber Research Institute of Thailand said.
Output from Thailand, Indonesia and Malaysia has been cut as a La Nina weather event caused higher-than-average rains in parts of Southeast Asia.
Supply is expected to decline further in coming months as the seasonal low-production period will start in major growing areas in Thailand, Tasaka at ACE Koeki said. Farmers reduce tapping during the so-called wintering period from February to May, when trees shed leaves and latex production drops. - Bloomberg
Read more: Rubber at record high for second day http://www.btimes.com.my/articles/20110210115002/Article/#ixzz1DXMc9lyB






Natural rubber production rises marginally
Posted: 09 Feb 2011 05:40 PM PST
Natural rubber (NR) production increased 2.8 per cent between April 2010 and January 2011. According to provisional estimates by the Rubber Board, the consumption of rubber grew 1.8 per cent, a marginal increase compared to 1.6 per cent in the April-December period.

Interestingly, the consumption of natural rubber took a U-turn in January, with a 1.3 per cent increase as compared to the negative growth of 1.3 per cent in December. In January, the consumption increased to 81,000 tonnes as against 77,500 tonnes in December 2010.

Production in January increased to 98,800 tonnes as against 97,500 tonnes in the same month of last year, registering a growth of 1.3 per cent. Cumulative production in April–January period increased to 7,49,950 tonnes as against 7,29,250 tonnes in the same period of last financial year.

During the same period, consumption increased to 7,89,230 tonnes as against 775,565 tones in the same period of last financial year.

(Source: http://www.sify.com/finance/natural-rubber-production-rises-marginally-news-default-lckbbNggbbi.html)






Rubber Smuggling Concern in Cambodia
Posted: 09 Feb 2011 05:39 PM PST
Border smuggling has been blamed by the General Directorate of Rubber as the cause of a 15 percent drop in exports of the Cambodian crop last year. The Ministry of Commerce reported yesterday (February 8) that rubber exports fell last year to around 30,039 tonnes, down from 35,482 tonnes in 2009.
But Ly Phalla, director general of the General Directorate of Rubber, told The Post that the figure reported did not tally with his estimates. He believes that between 45,000 and 50,000 tonnes of the lucrative crop have been transported to international markets – based on the 39,000 hectares of rubber trees harvested in the Kingdom last year each producing about 1.2 tonnes per hectare.
“We think that falling rubber exports were due to cross-border smuggling, because there are some small border entrances at which there are no authorities stationed in order to record export figures,” he said.
The Directorate expects production to increase in 2011 as more trees mature, but warned that poor management and a higher tax rate could affect exports.
Ly Phalla highlighted the government’s new rubber export tax, ratified by Hun Sen in December.
The tax had previously sat at $50 per tonne, regardless as to the value of rubber, but the highest-value rubber is now taxed at $300 per tonne.
“In 2011 rubber exports could slow down, if the authorities do not strictly control the border entrances,” he said.
Kun Nhem, deputy director of the General Department of Customs and Excise, said yesterday (February 8) the customs unit was strengthening management over exported goods, especially rubber.
He said that in order to implement this policy more effectively, the general department of custom and excise would ensure rubber exports are only made through the Trapaing Phlong border in Kampong Cham province to ease tax collection.
“We don’t know whether rubber is smuggled because recently we are strictly implementing our measures,” he said. One rubber producer, while supporting efforts to control rubber exports, also said that some yields had been lower than expected.
Deputy director of Sopheak Nika Investment Group, Men Sopheak, said that some younger rubber trees produced between 600 to 700 kilograms of rubber per hectare.
“I think the government should take action to effectively control rubber exports. “Prevention of smuggling can help the rubber industry in the future,” he added.
The price of rubber on international markets has soared this year. Yesterday (February 8), the July-delivery contract gained as much as 2.1 percent to 501.3 yen a kilogram (US$6,090 a tonne) before trading at 499.3 yen on the Tokyo Commodity Exchange as of 11:57 a.m.
The physical price of natural rubber in Thailand extended gains to an all-time high of 185.80 baht (US$6.06) per kilogram on concern over supply shortages in Thailand and Malaysia.
(The Phnom Penh Post, Cambodia, February 9, 2011)






India Car Sales Hit Record in January
Posted: 09 Feb 2011 05:38 PM PST
Car sales in India rose 26% over a year earlier to a monthly record in January as rising personal income in a growing economy bolstered demand in Asia's third-biggest automobile market.
According to data issued Wednesday (February 9) by the Society of Indian Automobile Manufacturers, an industry lobby group, auto makers sold 184,332 passenger cars in January, compared with 145,971 units a year earlier. That beat the previous all-time high sales of 182,992 cars last October.
Sales rose despite price hikes by companies such as Maruti Suzuki India Ltd., Hyundai Motor Co. and Volkswagen AG in the past month to offset higher raw-material costs.
The Indian automobile market weathered the global economic downturn better than the rest of the world, as new models and easy bank loans encouraged people to spend more on new vehicles.
Companies such as Ford Motor Co., Volkswagen, General Motors Co. and Nissan Motor Co. have aggressively expanded in India to offset a slump in their traditional strongholds, the U.S. and Europe, while Indian companies such as Maruti expanded their portfolio and capacities to take on increasing competition.
Consultancy firm J.D. Power and Associates expects growth in the Indian market to continue.
"We believe that the Indian market is all set for another record year in 2011," helped by strong fundamentals such as an expanding economy, higher personal income levels and the development of the country's roads, Darius Lam, a senior market analyst at J.D. Power, said in a recent report.
He said the consultancy expects total passenger vehicle sales to rise to 3.16 million units in 2011, up 17% from 2010.
But, Sugato Sen, a senior director at the manufacturers' body, said rising interest rates, accelerating inflation and higher raw-material costs would likely moderate growth in the next financial year, starting April 1.
India's central bank has raised its short-term rates seven time in the past one year, and is expected to tighten its policy further as inflation remains high. Commercial lending rates, which remained largely unaffected until recently despite the policy steps, have now started rising, also driven by a cash shortage in the banking system.
Still, customers may buy more vehicles in February, fearing another price rise in March after the government's budget presentation, Mr. Sen said. "People are anticipating an excise tax hike [in the federal budget] and that will increase prices of some models significantly."
In January, sales of Maruti, the leader in India's car market, rose 20% to 84,318 cars. The local unit of Suzuki Motor Corp. raised prices by 1,000 rupees-10,000 rupees on some models as cost of rubber and steel rose.
Mahindra & Mahindra Ltd., India's top sport-utility-vehicle maker by sales, also raised its vehicle prices by up to 2.5%, while Tata Motors Ltd., the country's biggest vehicle
maker by total sales, increased prices of its commercial vehicles by 1,500 rupees-30,000 rupees and of passenger vehicles by 3,000 rupees-15,000 rupees in January.
Mr. Sen of the manufacturers' body said exports in the current financial year may fall short of target, owing primarily to a slowdown in Europe. "We were targeting passenger vehicle exports of more than 500,000 this year ... But, I don't think we will be able to meet that."
Passenger vehicle exports in April-January fell 3% to 358,583 units from 369,180 a year earlier.
India's commercial vehicle sales during January rose 13% to 60,753 units. Tata Motors sold 35,831 commercial vehicle, up 15%, while Ashok Leyland Ltd. posted an 8% fall in sales to 6,880 vehicles.
Two-wheeler makers like Hero Honda Motors Ltd., Bajaj Auto Ltd. and TVS Motor Ltd. sold 747,818 motorcycles in January, a rise of 15%. Scooter sales rose 30% to 180,072 units.
(The Wall Street Journal, February 9, 2011)






NR prices on an upward spiral
Posted: 09 Feb 2011 05:35 PM PST
Natural rubber prices hit all-time high.

That’s been a common headline throughout the past month, as NR prices have climbed well past the $5-per-kilogram mark—to $6.05 in Tokyo on Feb. 7. With NR supply short and demand high, they show every sign of going higher.

The cause—a perfect storm in the NR world, a combination of soaring demand, weather woes, currency fluctuations and the slow pace of replanting and maturation of the Hevea brasiliensis tree.

NR prices have rocketed upward on various commodity exchanges. On the Singapore Commodity Exchange, Rubber Smoked Sheets 3 reached $5.70 per kilo for March delivery in Singapore Jan. 20, while Technically Specified Rubber 20 rose to $5.47 per kilogram.

Standard Indonesian Rubber 20, the natural rubber grade used most often by U.S. tire manufacturers, stood at $2.51 per pound at the port of origin Jan. 20, a full 10 cents higher than just eight days before.

At the same time, prices of styrene-butadiene rubber, the most commonly used synthetic rubber, haven’t matched the NR increases. But like NR and butadiene, SBR prices have risen.

SBR prices increased some $600 per metric ton to $3,000-$3,100 between early October and January, according to ICIS, an online chemical and synthetic rubber information service.

The NR situation

There is no real end in sight for skyrocketing NR prices, according to various participants in the field.

“It’s not going to get any better,” said a source close to the NR industry who asked to remain anonymous. “It’s just an ugly world out there, and I see shortages developing.”

The Association of Natural Rubber Producing Countries, a Southeast Asian group whose members account for more than 90 percent of world NR production, projected in November that world NR supply would fall 3.8 percent in the fourth quarter of 2010.

Major supply increases from Indonesia did not make up for a massive production shortfall in Thailand caused by heavy rains and flooding in the fall of 2010, the ANRPC said in the latest edition of its newsletter, Natural Rubber Trends & Statistics.

The Rubber Research Institute of Thai- land estimated that about 45,000 acres of Hevea trees had been flooded and another 39,000 acres damaged by heavy winds, the ANRPC said.

This caused not only short-term supply issues because of harvest disruptions, but also long-term problems because of tree damage that could reduce Thailand’s NR production by 30,000 metric tons annually, the association said.

Meanwhile, NR imports into China were expected to increase 21 percent during that quarter.

High prices and low supply in the NR market seem likely to continue for some time, according to the Rubber Economist Ltd., a rubber economics website with offices in Bangkok and London.

“The fact that short-term factors such as currency movements and weather can cause such a sharp increase or decrease in rubber prices points to a serious tightness in the market,” a spokes-man for the Rubber Economist said in an e-mail.

“In the long term, there is a general belief that there will be a structural surplus for many commodities, but not for NR,” the spokesman said. Rapid growth in Asia is more than making up for saturation of demand in the West, it said, while increasing production costs will influence NR-producing countries to slow down their replanting and harvesting efforts.

The SBR situation

SBR pricing is determined essentially by two factors, according to experts: vehicle demand and butadiene prices. NR prices, because NR and SBR are both such important raw materials in tire and rubber product manufacturing, also play a role in determining SBR prices.

Butadiene prices have been in a rare situation in the last few months, according to Gene Lockard, a senior editor/ manager at ICIS.

Every month, the four major producers of butadiene make nominations for the price of butadiene, Lockard said. The lowest nomination is the price for that month.

However, recently one or more producers have been unwilling to settle on the lowest nominated price, creating price increases.

Butadiene prices are the main factor in contract prices for SBR 1502 and 1712, the most common grades, according to Lockard. Spot prices, on the other hand, are tied mostly to demand.

“With new car sales flatter than a pancake for 2009, and only the Cash for Clunkers program creating temporary relief, SBR producers wound down capacity,” he said. In 2009, SBR facilities ran at an average of 65- to 75-percent capacity, he said.

But original equipment and replacement tire demand is growing again, creating what Lockard called a “mild to moderate” demand for SBR.

The enormous increases in NR prices are motivating tire and rubber product makers to minimize their use of NR in favor of synthetic rubber, according to Lockard. But this is not unmitigated good news for SBR producers.

“SBR producers are between a rock and a hard place,” he said.

“It doesn’t pay to be too aggressive in raising prices, or you might chase away customers.”

What manufacturers are doing

Balancing rubber product formulations to mitigate raw material cost increases is a delicate issue—so delicate, in fact, that few rubber product manufacturers are willing to talk about it, except in the most general terms.

“How can we find cheaper raw materials and make the same products?” said a spokesman for one manufacturer. “Where is that not a possibility? One of the challenges in a situation like this is going up to the customer and saying, ‘We can’t stay in business if we keep selling at the same price.’ “

In announcing their earnings, some rubber product manufacturers are frank about the effect of high raw materials costs. Continental A.G., for example, announced that record-high raw materials costs in 2010 cost the company an additional $625 million for the year.

“We hope that prices for natural rubber will return to more reasonable levels once weather conditions have calmed down and the winter season in the major production countries has come to an end,” said a Continental spokeswoman in Hanover, Germany.

Conti’s reaction to higher raw materials costs has been to raise prices, though these increases have only partially offset the higher costs, the spokeswoman said. Those price increases—8.5 percent in NAFTA countries and 7 percent in Europe—have already been announced, she said.

“To compensate for the climbing raw material costs—especially natural rubber—we will probably have to initiate further substantial price increases. The success of such a measure will depend on how the prices for natural rubber develop in the future.”

Some companies have taken sweeping measures to minimize raw materials costs. A spokeswoman for Freudenberg-NOK L.P., for example, said her company switched to mostly SR five or six years ago, so NR price increases have had little effect on it. Higher SR prices also have not been a major factor for Freudenberg, she said.

(Source: http://www.rubbernews.com/latexnews/full-story.html?id=1297096829)






Rubber Climbs to Record on Prospects for Increased China Demand
Posted: 09 Feb 2011 05:34 PM PST
Rubber climbed to a record on expectations that demand from China for the commodity used in tires will keep expanding even after the nation raised interest rates for the third time in four months to restrain inflation.

The July-delivery contract gained to as much as 510 yen a kilogram ($6,178 a metric ton) in after-hours trade on the Tokyo Commodity Exchange. Transactions in this session are settled tomorrow. Futures in Shanghai surged 4.3 percent to a record 43,500 yuan a metric ton as trade restarted after a holiday.

The People’s Bank of China raised the one-year lending rate by a quarter point to 6.06 percent, effective today, and the one-year deposit rate by an equivalent amount to 3 percent. PremierWen Jiabao’s government has yet to return rates to pre- crisis levels, seeking to sustain the economy’s rebound.

“The moderate increases in Chinese rates are unlikely to derail the nation’s economy from expansion,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said by phone. There’s “speculation demand from China will continue to grow.”

China’s central bank announced the move yesterday, the last day of the weeklong Lunar New Year holiday, and before a report next week that may show consumer prices rose 5.3 percent in January, according to the median estimate in a Bloomberg survey.

“Demand in China remains strong and stockpiles are at low levels,” Pornthip Wongjirattikarn, marketing manager at Future Agri Trade Co., said by phone from Bangkok.

All-Time High

The physical price of natural rubber in Thailand, the world’s largest exporter, extended gains to an all-time high of 187.80 baht ($6.12) per kilogram, boosted by strong demand from local and overseas buyers amid concerns over supply shortages, the Rubber Research Institute of Thailandsaid today.

Natural-rubber consumption in China may rise 9 percent to 3.6 million tons this year, while rubber use in India may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries.

Output from Thailand, Indonesia and Malaysia, which account for about 70 percent of global supply, has been curbed as a La Nina has led to higher-than-average rains in parts of Southeast Asia. The weather event started in June.

Supply is expected to decline further in coming months as the seasonal low-production period will start in major growing areas in Thailand, Saito at Fujitomi said. Farmers reduce tapping during the so-called wintering period from February to May, when trees shed leaves and latex production drops.

Rubber futures have gained 23 percent this year, extending last year’s 50 percent rally, as rising car sales led by China and India boosted demand for tires.

(Source: http://www.bloomberg.com/news/2011-02-09/rubber-climbs-to-record-on-prospects-for-increased-china-demand.html)






Spot rubber turns weak
Posted: 09 Feb 2011 05:29 PM PST
KOTTAYAM, FEB. 9:

The physical rubber prices turned weak on Wednesday. The market slipped on buyer resistance reducing the gap between the domestic rubber futures on the NMCE. According to sources, there was selling from dealers but the volumes were dull. The trend was partially mixed as ISNR 20 remained flat and rather inactive.

Sheet rubber declined to Rs 235 (237) a kg according to dealers. The grade finished weak at Rs 235.50 (237) a kg both at Kottayam and Kochi as quoted by the Rubber Board.

As per reports, global demand for natural and synthetic rubber will enhance by about 40 per cent to 33.9 million tonnes in 2020 driven by consumption in India and China. The world consumption may be around 24.3 million tonnes in 2010, 15.3 per cent higher than 2009, and it is expected to gain another 6.3 per cent in 2011.

FUTURES RECOVER

RSS 4 recovered at its February series to Rs 234.75 (231.35), March to Rs 240.15 (236.93), April to Rs 249.15 (245.39) and May to Rs 252.47 (248.95) a kg on the National Multi Commodity Exchange (NMCE).

The volumes totalled 17322 lots and open interest 13665 lots. The turnover was Rs 415.39 crores.

RSS 3 (spot) firmed up further to Rs 278.08 (275.61) a kg at Bangkok. The February futures for RSS 3 improved to ¥507.5 (Rs 279.49) from ¥503 a kg during the day session and then to ¥512 (Rs 281.97) in the night session on then Tokyo Commodity Exchange (TOCOM).

Spot rates were (Rs/kg): RSS-4: 235 (237); RSS-5: 225 (227); ungraded: 220 (221); ISNR 20: 231 (231) and latex 60 per cent: 150 (152).

(Source: http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article1200534.ece)






Rubber output rises 1.3% in Jan
Posted: 09 Feb 2011 05:28 PM PST
KOCHI, FEB. 9:

Rubber production has grown marginally by 1.3 per cent in January to 98,800 tonnes as against 97,500 tonnes last year.

The absence of rains and conducive weather were reportedly the reasons behind the growth in production. However, the small growth in production has not been able to stem price rise.

Consumption also grew marginally in January to 81,000 tonnes. Rubber imports recorded a nominal growth during the month.

There is an acute shortage of skilled labour in the rubber holdings of the country, Mr N. Radhakrishnan, Advisor to the Cochin Rubber Merchants Association, said. This shortage is already afflicting the medium rubber holdings and could affect potential production. While small grower can take recourse to his in-house tapping skills, large estates can depend on their captive labour.

It is the medium holding of 20-200 acres that are often finding acute labour shortage. And this is expected to translate into lower production. The sheer growth in the number of rubber trees planted and the growth in number of trees tapped need not necessarily reflect into a spurt in production unless the labour shortage is addressed, Mr Radhakrishnan added.

Production for the April-January period was up 2.8 per cent at 7,49,950 tonnes (7,29,250 tonnes). The growth in consumption was just a notch lower at 1.8 per cent to 7,89,230 tonnes (7,75,565 tonnes). With the international prices often breaching the domestic prices, growth in rubber imports was also muted during the first 10 months of the current fiscal. Exports witnessed a deceleration during the period.

The Rubber Board figures paint a rosy picture about the stock of rubber available in the country at the end of January 2011. As against 2,91,530 tonnes of natural rubber available during last year, rubber stocks have grown to 3,27,115 tonnes at the end of January this year.

(Source: http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article1200418.ece)






Expectations Of Further Rises On Shanghai Rubber Futures Pushed Up NR Prices
Posted: 09 Feb 2011 05:19 PM PST
The benchmark prices for Feb. and Jul. deliveries on Tokyo rubber futures (Tocom) hit new record highs above a 500 yen/kg level on 4 Feb. while cash prices on physical markets followed suit except for Shanghai rubber futures, which still closed until 8 Feb. for the Lunar New Year holidays break.

The currently main factors which lend support for the rises on both markets are high crude oil futures, an upbeat U.S. economic data on a decline in an unemployment rate and an increase in nonfarm payrolls in January, flooding in Southern Malaysia, strengthening Asian currencies against the greenback, supply tightness and steady demand for rubber in the rubber market, particularly China and India.




Tokyo rubber hits new peak
Posted: 09 Feb 2011 05:15 PM PST
Bangkok (february 10, 2011) : tokyo rubber futures rose to a new record high on wednesday on speculative buying backed by tight supply in producing countries, but china's move to curb inflation prevented prices from rising sharply further. the benchmarkrubber contract on the tokyo commodity exchange rose 5.1 yen to settle at 504.4 yen per kg. it jumped as high as 508.3 yen, the highest ever.
in shanghai, which reopened on wednesday after a week-long holiday, the key contract for may delivery rose to a record high of 43,500 yuan ($6,639) per tonne immediately after the opening, above the previous high of 41,850 yuan hit on january 31. it settled at 42,215 yuan per tonne.
"rubber prices should rise much further, but the rises are capped by fears of falling demand after china raised interest rates to cool down its economy," one dealer said. with tight supply, the benchmark thai rss3 was offered at a new record high of $6.15 per kg on wednesday, while other asian rubber grades stayed at relatively high levels.

(Source: http://www.brecorder.com/news/agriculture-and-allied/world/1153652:tokyo-rubber-hits-new-peak.html?hl=rubber)