Earthquake Likely To Affect Japanese Automakers' China Ventures--Rubber Export Put on Hold

Rubber Export Put on Hold
THURSDAY, MARCH 17, 2011

The government rubber committee has ordered suspension of rubber export due to the price that is not in line with trading nature as the figure should be over 80 baht per kilogram.
Deputy Prime Minister in charge of security and head of the National Rubber Policy Committee, Suthep Thaugsuban, commented on the panel's decision to halt rubber export, saying that export activities will be suspended until the price stabilizes as it has declined irregularly when compared to the trading nature.
The deputy premier said he has scheduled a meeting with related agencies next Monday to discuss the issue since rubber export must be given special attention as it is one of the country’s biggest earners.

When asked about farmers’ demand for the government to set a 100-baht per kilogram guarantee price, Suthep said that the media must carefully present facts about the issue as when the government started tackling the low rubber price, the figure was set at 80 baht and he felt that 120 baht per kilogram is appropriate.
Suthep added that some areas have seen improvement with rubber price at 90 baht per kilogram and it is expected to continue to gradually improve as retailers and exporters receive loans from commercial banks and will purchase rubber from farmers.
On a speculation that some exporters are trying to hoard rubber, the deputy premier believes it is a misunderstanding among the press due to the price which is not in line with trading nature.



Earthquake Likely To Affect Japanese Automakers' China Ventures
THURSDAY, MARCH 17, 2011

The earthquake in Japan will pose a serious impact on the supply of components Japanese automakers' joint ventures in China, according to auto industry analysts.
China-Japan auto joint ventures in Guangzhou, such as Guangzhou Toyota Motor Company and Guangqi Honda Automobile Company, can still maintain normal production. But how long this situation can last depends on the follow-up component supply.
"We have decided to prolong production shutdowns in Japan as we need to confirm the damage of its plants and are unsure of the supply of component suppliers," Honda's liaison in China said on March 14. Honda will prolong the production shutdowns of all plants in Japan until March 20 and is uncertain whether it can resume production thereafter.
Toyota Motor has shut down all of its plants in Japan and will not resume production until March 16. It was estimated that output would drop by 40,000 units because of the three-day production suspension. Toyota's output in Japan accounts for about 45 percent of its total output around the world.
Production of joint auto ventures depends on imports of key components.
The production shutdown of these Japanese auto enterprises is undoubtedly bad news for joint ventures in China. Although the current localization degree of joint venture brands has reached more than 90 percent, production may be halted at any time if the supply of key components imported from Japan is ceased.
Honda said that they can only momentarily guarantee one week of normal production in vehicle factories in China. In regards to motor vehicles, production at Guangzhou Honda, Dongfeng Honda and Honda Motors (China) located in Guangzhou, which produce and export the Jazz, will not be affected before this weekend, according to sources within the company.
In regard to motorcycles, the production of Wuyang Honda Motors and Honda Sundiro will not be affected before the end of March. In regards to general products, the production of Jialing Honda and Honda Mingdong will not be affected before the end of March.
"The normal production of Guangzhou Toyota and FAW Toyota will not be affected," Toyota China said. However, the impact on other supporting parties depends on the situation in Japan.
(People's Daily Online, China, March 16, 2011)




Tokyo Futures Jump On Supply Concerns
THURSDAY, MARCH 17, 2011

Tokyo rubber futures rebounded sharply for a second consecutive day on Thursday (Mar 17) on supply concerns and hopes of a possible intervention by producing countries to prop up prices.
FUNDAMENTAL
The benchmark rubber contract on the Tokyo Commodity Exchange for August delivery rose more than 4 percent to the session's high of 385.5 yen ($4.77) per kg.
However, prices were still well below a record high of 535.7 yen, hit in mid-Feb. The benchmark contract touched a four-month low earlier this week.
The most active rubber contract on Shanghai Commodity Exchange for May delivery fell 335 yuan to stay at 33,910 yuan per kg by 0119 GMT.
The world's top rubber producing countries, Thailand, Indonesia and Malaysia, will hold an urgent meeting this week to find ways to support prices that have collapsed this month, a senior industry official said on Tuesday (Mar 15).
U.S. oil prices slipped as much as 1.4 percent to below $97 on Thursday (Mar 17), as the worsening nuclear crisis in Japan offset intensifying clashes in the streets of Bahrain.
The yen soared to a record high against the dollar on Thursday (Mar 17) in chaotic trading as a break of the previous peak triggered a host of stop-loss and option-related selling, which in turn caused a cascade of algorithmic sales.
(Reuters, March 17, 2011)




Rubber gains for second consecutive day after the free fall
THURSDAY, MARCH 17, 2011


AHMEDABAD (Commodity Online): Rubber prices have slide about 26% from its all-time high of around Rs 24,778 per 100 kg before few weeks on NMCE. The fall cached fire after Japan’s quake but the crash was mainly due to speculation in the commodities market.
Earthquake which struck Japan and spurred a nuclear crisis will have limited impact on global demand because there is no damage to plants owned by major firms such as Bridgestone Corp and Michelin , the Association of Natural Rubber Producing Countries said on Tuesday
The closure of a handful of auto-tire plants in the country's northeast region for a few days cannot impact on the commodity's global demand in a significant way "If at all there is any marginal impact, it will be for a short-term only."
Japan accounts for seven per cent of the global demand for natural rubber. India’s auto demand has been robust and this is expected to sustain. Rubber prices nearly doubled over the last one year but due to fears of lower global demand for at least for two-three quarters amid Japanese crisis led to traders offloading stock rapidly, which brought down the price.
Once Japan will start rebuilding there will be a huge demand for natural rubber and prices may rebound.
Yesterday Rubber April contract at NMCE opened near to its low but gave smart recovery on all arround buying and closed on buyer’s circuit of 20570. Rubber made hammer on daily chart and today even it is on buyers cap which gave the confirmation of its long term bullish trend .
“Technically, Long term traders are advised to maintain buying positions with the stop loss of recent low of 18400.” said Bharti Navlani, technical analyst with Commodity Online.




Bridgestone Restarts Japan Production, TBR Tyres Given Priority
THURSDAY, MARCH 17, 2011


Bridgestone has given further information on restarting production in its factories located in Japan’s Kanto region or north of that region. Production at the company’s Yokohama and Tokyo factories has already recommenced, although electricity supply and other issues are still restricting a return to full production at the Yokohama site. It is anticipated that Bridgestone’s Tochigi, Nasu and Kurioso factories will recommence production on March 16. Deliveries from the Tokyo plant are expected to restart on March 16 and deliveries from Tochigi and Nasu on March 18 or thereafter.
In announcing this schedule, Bridgestone points out that “though there is no critical damage at the factories, there are some facilities or equipment damaged, and earthquake aftershocks have been following.” The tyre maker has also determined that truck and bus tyre manufacture will take priority when production restarts, as these products are most needed for the recovery of the devastated areas in Japan. Bridgestone also says it will “appropriately” cooperate with the rolling blackouts that have been announced, adding: “At the same time, we will endeavour to minimise the impact of the blackouts through the full utilisation of co-generation systems which are installed at each factory.”
(Tyrepress.com, March 16, 2011)




Key TOCOM Rubber Contract Up 3 Pct On Short-Covering
THURSDAY, MARCH 17, 2011

The benchmark rubber contract on the Tokyo Commodity Exchange for August delivery rose significantly on Wednesday (Mar 16) on short-covering and supply concerns.
"Prices rebound in line with stock market and investors buy back contracts on news that Asian government would push physical prices higher," said a Tokyo-based dealer.
The benchmark contract rose 3.2 percent to the session high of 364.5 yen ($4.51) per kg, from Tuesday's (Mar 15) close of 353.0 yen per kg.
(Reuters, March 16, 2011)




Domestic natural rubber prices up by Rs 4 to Rs 201/kg
THURSDAY, MARCH 17, 2011

Natural rubber (NR) prices today rose by Rs 4 to Rs 201 per kg in the domestic spot markets on the back of adjustment of prices in the international and domestic future markets.
The prices of NR in the domestic spot market were ruling at Rs 187 per kg yesterday, according to the Rubber Board data.
"The prices in the spot markets here were guided by the adjustment in prices at the major international spot and future markets," Cochin Rubber Merchants Association Advisor N Radhakrishnan said.
Radhakrishnan said Tokyo Commodity Exchange (TOCOM) is the major international future market prices indicator and the prices of rubber contracts increased a bit on TOCOM, which led to price adjustments in the domestic future and spot markets.
"The international spot markets also have risen on back of price adjustments in TOCOM," he added. The rate of NR at the international spot market at Bangkok rose by almost Rs 3.24 to Rs 204.62 per kg today as against Rs 201.38 yesterday, Rubber Board data said.
Radhakrishnan said the market situation is still unstable but a major flare-up in the NR rate is not expected likely. "There could be minor adjustments in the NR prices in the coming days," he added.
According to experts, flare up in NR prices is not anticipated as there are sufficient stocks in the country. In the first 11 months of the current fiscal, natural rubber production in the country increased by 3 per cent to 8.04 lakh tonnes, according to the Rubber Board data.
(Source: http://www.business-standard.com/india/news/domestic-natural-rubber-pricesby-rs-4-to-rs-201kg/129257/on)




THAILAND SUSPENDS RUBBER EXPORTS
THURSDAY, MARCH 17, 2011

BANGKOK, March 16 (Bernama) -- Thailand has suspended its rubber exports until declining prices of the commodity on the domestic market improves, Thai News Agency (TNA) reported Deputy Prime Minister Suthep Thaugsuban as saying Wednesday in his capacity as chairman of the National Rubber Policy Committee. The prices of Thai rubber have been down from a record high of 187 baht (RM18.75) a kilogramme to 95 baht now (RM9.50). The decline has been attributed to weak demand from China, a major rubber importer, and the massive earthquake and tsunami that hit Japan on March 11.
According to the Thai deputy premier, the current prices of rubber on the domestic market remained higher than the Thai government''s target, but a suitable rubber price should be about 120 baht (RM12) a kilogramme. The Thai deputy premier said he believes that the domestic rubber prices will gradually improve, as local traders have now received additional loans from commercial banks to purchase rubber from local plantations.




Brainstorming in the offing to check falling rubber prices
THURSDAY, MARCH 17, 2011

BANGKOK (Commodity Online) : In an effort to combat the free fall of rubber prices, the top rubber producing nations of the world—Thailand, Indonesia and Malaysia—will hold an urgent meeting this week.
Thai USS3 prices dropped to 90 baht ($2.95) per kilogram on Tuesday from 95 baht on Monday which is 50% of the record high of 180 baht achieved in February, reported http://www.thejakartaglobe.com.
TOCOM rubber futures have been going down since the Japan crisis has started unfolding.
Tokyo August contract rubber hit 12% down when compared to Monday’s close of 384.1 yen at 335.0 yen ($4.10) per kilogram. This figure is 40% drop from the record-setting mid-February high of 535.7 yen.
Yesterday, there were reports that the Thailand government had asked exporters to suspend operations. However there have been no reports of export cancellations.
The Thailand authorities are also keen to stockpile rubber as they have asked farmers not to sell below minimum level and have asked banks to issue credit to traders to hoard rubber.
The three countries account for 70% of global rubber output.