Rubber in Tokyo jumps most in 2 yrs

Rubber in Tokyo jumps most in 2 yrs
FRIDAY, MARCH 18, 2011

Rubber jumped the most in more than two years as supply tightened after the Thai government asked exporters to halt shipments and as Japanese tire plants resumed production after last week’s earthquake. The August-delivery contract surged as much as 8.1%, the most since January 5, 2009, recovering from a four-month low of 335 yen reached on March 15. The price closed at 396.9 yen ($5,032 a tonne). In after-hours trade, futures extended gains to as high as 409.2 yen.



Rubber Fundamentals to Stay Strong on Tight Supply
FRIDAY, MARCH 18, 2011

18 March 2011
The current tight supply in major natural rubber producing countries will help support prices, after the market plunged from record high levels following an earthquake and tsunami in Japan, the Malaysian Rubber Board said Thursday.
Rubber prices plunged earlier this week after damage to tire and automobile factories in Japan raised concerns of a slowdown in natural rubber demand.
Malaysia is the world's third-largest producer of natural rubber after Thailand and Indonesia. The three countries comprise the International Rubber Consortium and account for about 70% of global natural rubber output.
The Thai government, through the International Rubber Consortium, has asked Indonesia and Malaysia to maintain prices after Thailand announced a minimum price for the commodity, IRCo acting Chief Executive Yium Tavarolit said.
He added that the three members have agreed to work together on any potential price control measures, which could include export suspension below a certain price level.
"Japan is not a major price-determining factor where natural rubber consumption is concerned. Nevertheless, we are closely watching the market and will take necessary measures if the need arises," an MRB official, who didn't wish to be named, told Dow Jones Newswires.
He refused to disclose whether Malaysia will follow Thailand's move to set a minimum price for the commodity.
However, officials at the Indonesian Rubber Association and MRB confirmed that they may meet with Thai exporters to discuss measures to halt the downtrend in prices.
Thailand's deputy prime minister Suthep Thaugsuban Monday pledged to maintain local rubber prices at no less than THB120 a kilogram. He also urged suspension of exports and is calling for a meeting of agencies Monday to discuss the measure, the Bangkok Post reported Wednesday.
(Source: http://www.irco.biz/BlogMoreDetial.php?id=2739&ShowContent=news)




Indonesia Rubber Group Says $4 Price Should Be Defended
FRIDAY, MARCH 18, 2011

The Rubber Association of Indonesia wants a price of $4 per kilogram defended and
urged its members not to sell in a panic after prices plunged.
Rubber is in short supply because of the wintering now in growing regions and the
potential demand from consumers and tire manufacturers is still strong because of
the economic recovery in the U.S. and growth in China, the association, also known
as Gapkindo, in a statement. Indonesia is the world’s second-largest producer.
The International Rubber Consortium Ltd., which comprises Thailand, Malaysia and
Indonesia, will probably delay exports to counter a price slump as demand outpaces
supply during the low production period, Yium Tavarolit, the acting chief executive
officer said today (Mar 17). Rubber futures have plunged 26 percent from a record
535.7 yen a kilogram ($6,778 a ton) on Feb. 18 on Middle East tensions and slowing
vehicle sales in China.
“We hope that by this measure we can stem the natural rubber prices from falling
further and all members can conduct the trade in an orderly manner,” the association
said.
The price of Indonesian benchmark SIR-20 grade has plunged from $5.7 a kilogram
in mid-February, the statement said, without providing the current level. SIR-20 was
traded at about $4.6 a kilogram as of March 11, according to data from the
International Rubber Consortium Ltd.
(Bloomberg, March 17, 2011)



Rubber May Extend Rebound on Export-Curb Plan, Quake Rebuilding
FRIDAY, MARCH 18, 2011

Rubber may extend a rebound from a four-month low as exporting nations said they may curb shipments and demand from the auto industry in China, the largest consumer, and rebuilding efforts in quake-hit Japan spur buying.
“The underlying supply-and-demand imbalance, where there‟s basically insufficient supply, isn‟t going to disappear very quickly,” said Peter Kelly, head of tire and rubber research at LMC International Ltd. “Demand will still be very strong.”
Rubber has jumped after Thailand, the largest producer, asked exporters to halt shipments and as tire plants in Japan resumed production after last week‟s earthquake. Harvests in Thailand, Indonesia and Malaysia will fail to meet demand for a second year in 2011, Goldman Sachs Group Inc. estimates. Annual vehicle sales in China surged about 10-fold in the past decade.
“Prices may rise again after the recent drop,” Sun Huaijian, general manager for commercial tire department at Giti Tire (China) Investment Co., said in an interview yesterday (Mar 17) in Qingdao, China. “Governments of producing countries will introduce various policies to stem the decline in prices.”
Thailand, Indonesia and Malaysia, the biggest producers, will probably delay shipments to counter a price slump, according to International Rubber Consortium Ltd. In 2009, the three nations cut exports to combat a 56 percent price slump amid the global financial crisis.
Thailand‟s Deputy Prime Minister Suthep Thaugsuban said this week that he‟d asked exporters to suspend shipments to stem the plunge in prices and will ask banks to offer low-interest loans to help shippers stockpile the raw material.
Record Price
August-delivery futures climbed as much as 7.2 percent 425.5 yen per kilogram on the Tokyo Commodity Exchange and were at 413.1 yen at 10:17 a.m. today (Mar 18). The price, which reached a record 535.7 yen on Feb. 18, plunged to 335 yen March 15, the lowest intraday price since Nov. 4, after Japan‟s strongest earthquake and a tsunami forced manufacturers to halt production.
The 9.0 quake and tsunami hit northeastern Japan on March 11, damaging several nuclear reactors and killing at least 4,277 people. Technicians have struggled to contain fires and radiation leaks at the Fukushima Dai-Ichi nuclear power station north of Tokyo as rescue workers battled to come to terms with the aftermath of the quake, which has left hundreds of thousands stranded without food and water.
Toyo Tire & Rubber Co. suspended most operations at three plants in northern Japan, the company said yesterday (Mar 17). Toyo Tire gave no timeframe for resuming operations, saying the facilities were not badly damaged.
Quake Assessment
Still, natural-rubber demand won‟t be significantly affected by the earthquake, the Association of Natural Rubber Producing Countries said on March 15. Japan accounts for 7 percent of global natural-rubber demand.
“People are concerned that Japan‟s earthquake may slow or derail the global economic recovery, because it‟s a big economy,” Forest Hu, manager at the rubber department of PKU Founder Commodities Group Co. Still, “the earthquake alone can‟t justify the slump we saw in prices.”
Prices had lost as much as 37 percent from the Feb. 18 record as worsening Middle East tensions and slowing car sales growth in China raised concerns demand may drop. Losses deepened after the quake forced Japanese carmakers to halt production.
Bridgestone Corp., the world‟s biggest tiremaker, restarted three plants in Tochigi, Japan, the company said on March 16.
„Trigger Demand‟
“Japan‟s rebuilding process probably will trigger demand for rubber, for vehicles that are deployed for reconstruction and also the automobiles coming back onto the roads,” Rajiv Budhraja, head of India‟s Automotive Tyre Manufacturers‟ Association, said March 16. The auto industries in China and India will also fuel demand for rubber, Budhraja said.
Natural-rubber demand in China, the biggest consumer, will rise 8 percent this year, lifted by record car-tire production, said Deng Yali, deputy head of the China Rubber Industry Association. Consumption will be 3.24 million metric tons, while tire output will climb 7.9 percent to an all-time high of 453 million units, Deng said on March 16.
Passenger-vehicle sales surged 33 percent in 2010, as government stimulus measures and economic growth helped the nation remain the world‟s largest auto market for a second year.
Strong demand will come amid reduced output from the main Southeast Asian producers. Heavier-than-usual rain in Southeast Asia, which supplies 70 percent of the world‟s rubber, disrupted harvests over the past several months.
While farmers will increase supply by 9 percent this year, they won‟t eliminate shortages, as demand advances to its highest level since at least 2000, according to a team of Goldman analysts led by Tokyo-based Yuichiro Isayama.
(Bloomberg, March 18, 2011)




Thai Govt Says Asked Exporters To Halt Rubber Shipments
FRIDAY, MARCH 18, 2011

The Thai Government Has Asked Rubber Exporters To Halt Shipments And A State Body Overseeing The Sector Will Meet Next Week To Look At Further Ways To Support Prices, Deputy Prime Minister Suthep Thaugsuban Said On Thursday (Mar 17).
"I Will Call An Urgent Meeting On Monday To Discuss How To Push Rubber Prices Higher So They Stay At Those High Levels," Suthep Told Parliament On Thursday (Mar 17).
The Government Had Already Asked Exporters To Halt Exports And Keep Rubber In Stock, He Said, Adding That They Had Around 300,000 Tonnes Of Smoked Rubber Sheet (RSS3) In Stock Now.
Thailand Is The World's Biggest Rubber Exporter.
(Reuters, March 17, 2011)




NMCE Rubber regains on fresh buying
FRIDAY, MARCH 18, 2011

NMCE rubber futures continued the uptrend on fresh buying on previous losses on Wednesday. Domestic spot market also extended the recovery which supported the upside and prices again traded above 20,000 per quintal at spot.
Rubber futures at TOCOM also traded on positive side after a huge fall in prices. Thus on cues from above stated factors fresh buying pushed the prices at NMCE and futures ended in 4% upper circuit.
The rubbers futures are projected to continue the positive trend on extended fresh buying on Thursday. Recovery at domestic and international market rubber prices might support the prices.
Reports of government of Thailand has asked exporters to stop the shipments as Auto manufacturing companies in Japan have resumed their activity is likely to push the prices.
Factors to Watch For
Rubber spot market of Kochi again crossed the `20,000 per quintal yesterday taking cues from global rubber market sentiments
As per the Committee on rubber policy of Thailand Government, Thai government will negotiate with commercial banks to extend loans to exporters to buy rubber from farmers at a minimum price of 120 baht per Kg
According to rubber board of India, Indian February Natural Rubber Output is 54,500 Tons Vs 51,500 Tons, consumption is 79,000 Tons Vs 76,350 Tons and imports are 6,831 Tons Vs 12,278 Tons
As per data released by rubber board, the year end deficit in natural rubber in India is estimated around 1.2 lakh tons and it is expected to be increase to 2 lakh tons during 2011-12
According to the Rubber Research Institute of Thailand, physical price of Thai rubber was up by 1.5 percent to 137.25 baht ($4.51) a kilogram on Wednesday
According to the Association of Natural Rubber Producing Countries, Consumption in China, India and Malaysia, representing 48% of global usage, will increase this year
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE March contract, prices are rising while volumes and open interest are falling. Market is running out of traders willing to open or hold an open long/buy. Traders are liquidating both loosing short positions & closing winning long positions. A higher probability the market is set to retrace in price lower at some point.
Japan Futures (TOCOM)
The TOCOM active August contract, prices are rising while volumes and open interest are falling. Market is running out of traders willing to open or hold an open long/buy. Traders are liquidating both loosing short positions & closing winning long positions. A higher probability the market is set to retrace in price lower at some point.
Shanghai Futures (SHFE)
The SHFE active July contract, prices are rising while volumes and open interest are falling. Market is running out of traders willing to open or hold an open long/buy. Traders are liquidating both loosing short positions & closing winning long positions. A higher probability the market is set to retrace in price lower at some point.
(Source: http://www.commodityonline.com/futures-trading/technical/NMCE-Rubber-regains-on-fresh-buying-22622.html)



Natural rubber prices rise for 3rd straight day to Rs 215/kg
FRIDAY, MARCH 18, 2011

New Delhi, Mar 17 (PTI) Continuing upward trend for the third day in a row, natural rubber (NR) prices today jumped Rs 14 per kg to Rs 215 in the domestic spot market on firm cues from the international market.
Prices of natural rubber were ruling at at Rs 201 per kg yesterday, the Rubber Board data showed.
"Spot prices are increasing here taking cues from the Tokyo Commodity Exchange (TOCOM), where natural rubber is trading on a positive direction," Indian Rubber Dealers Association President George Valy told PTI.
The spot prices also took firm indication from the domestic commodity exchange NMCE, where natural rubber prices were trading upward following a rise in global prices,he said.
In Bangkok, NR spot prices were up Rs 3.89 at Rs 208.51 per kg against Rs 204.62 yesterday.
Global NR prices have been rising for last two days fears of shortages in view of rising demand, analysts said.
In the first 11 months of the current fiscal, natural rubber production in the country increased 3 per cent to 8.04 lakh tonnes, the official data showed.
(Source: http://in.news.yahoo.com/natural-rubber-prices-rise-3rd-straight-day-rs-20110317-065500-420.html)



Thailand Moves to Shore Up Rubber Prices
FRIDAY, MARCH 18, 2011

The Thai government has asked rubber exporters to halt shipments and a state body overseeing the sector will meet next week to look at further ways to support prices, Deputy Prime Minister Suthep Thaugsuban said on Thursday.
Rubber prices hit record highs in mid-February but have plunged this month as doubts grew over demand and the global economy, in reaction first to unrest in the Middle East and then to last week's devastating earthquake in Japan.
"I will call an urgent meeting on Monday to discuss how to push rubber prices higher so they stay at those high levels," Suthep told parliament on Thursday.
The government had already asked exporters to halt exports and keep rubber in stock, he said, adding that they had around 300,000 tonnes of smoked rubber sheet (RSS3) in stock now.
Thailand is the world's biggest rubber producer and exporter.
Major rubber exporters said they had stopped offering rubber in new deals but that was due as much to the volatility in prices as to the request from the government.
"I can't sell at these low prices as our costs are higher," said Vorathep Wongsasuthikul, CEO of Thai Rubber Latex, one of Thailand's top five rubber-exporting firms.
Tokyo rubber futures, which set the global trend, jumped as much as 8 percent on Thursday to 399.0 yen ($4.94) per kg, with dealers citing heavy buying by investment funds after prices climbed above major resistance at 390 yen.
Even though prices have picked up from the lows, the top three rubber producers -- Thailand, Indonesia and Malaysia -- are looking for ways to push them higher.
However, a meeting of the International Rubber Consortium (IRCo), which brings together rubber industry officials, exporters and government officials from the three countries, has been pushed back from this week.
"We need to wait for the outcome of Thailand's national rubber committee meeting first and then we will call a meeting with the other two allies on whether they agree with us," said Yium Tavarolit, the Thai acting chief executive of the IRCo.
The IRCo meeting would be held in March, he added.



Thai Government Moves Boost Natural Rubber Prices
FRIDAY, MARCH 18, 2011

Recent moves by Thailand, the world's largest natural rubber producer and exporter, have shored up the commodity's prices, which fell sharply this month from record high levels in February.
The Thai government, through the International Rubber Consortium, has asked Indonesia and Malaysia to maintain prices after Thailand announced a minimum price for the commodity, IRCo acting Chief Executive Yium Tavarolit said Thursday.
IRCo comprises officials and exporters from Thailand, Indonesia and Malaysia, which collectively account for about 70% of global natural rubber output.
Yium said the three members have agreed to work together on any potential price control measures, which could include export suspension below a certain price level.
In late 2008, IRCo members had decided to reduce supply in 2009, but the measure didn't kick in as prices recovered.
Yium said Tuesday that the three countries would meet this week to discuss measures to stem falling prices, but that meeting is now on hold as prices have recovered somewhat and as the Thai authorities hold their own meeting first.
Meanwhile, the Thai authorities and industry players have also been taking steps to support the market. Thailand accounts for about one-third of global rubber output.
Deputy Prime Minister Suthep Thaugsuban Monday pledged to maintain local rubber prices at no less than THB120 a kilogram. He also urged suspension of exports and is calling for a meeting of agencies Monday to discuss the measure, the Bangkok Post reported Wednesday.
Meanwhile, leaders of the Rubber Growers Cooperative Federation of Thailand will meet Prime Minister Abhisit Vejjajiva next week to ask the government to intervene in the issue of falling rubber prices, the paper said Thursday.
Yium said agricultural authorities in Thailand will also meet soon to discuss the issue of price controls before contacting Indonesia and Malaysia.
IRCo said Wednesday it is also setting up a joint working group with the China Rubber Industry Association to counter price volatility. China is the world's largest consumer and importer of the commodity.
The moves by Thailand have boosted prices, with Thai unsmoked sheet 3-grade rubber breaching the THB120/kg level Thursday at the central markets versus THB89.00-THB102.59/kg Monday.
Traders and farmers are also taking cues from Suthep's statement to stockpile the commodity and to not try to push prices down, said a trader in southern Thailand.
This sent USS3 arrivals down to 3.5 metric tons Thursday at the central markets--down from 122.5 tons Monday.
On the bellwether Tokyo Commodity Exchange, whose benchmark contract rubber price has been recovering since Wednesday, the August contract settled at Y396.9/kg Thursday, off a fourth-month low of Y335 Tuesday.
Tocom rubber prices hit a record high of Y535.7/kg on Feb. 18 before sliding sharply, as market sentiment was damped by geopolitical tensions in the Middle East, tightening fears in China and the earthquake and tsunami in Japan, despite the fact that major producing countries are in the low-production season.
(Source: http://www.irco.biz/BlogMoreDetial.php?id=2732&ShowContent=news)



'Markets favourable for more rubber latex exports'
FRIDAY, MARCH 18, 2011

KOTTAYAM (Commodity Online) : Latex producers should make long term arrangements to export their produce on a regular and steady basis, said Sheela Thomas, Chairman, Rubber Board of India while speaking in a meeting of the latex producers convened by the Board, here Thursday.
She said that public sector rubber companies, being major producers of latex, should make special efforts in this direction.
The meeting noted that the prevailing market situation, wherein the international latex price is ruling higher than the domestic price, is favourable for exports. Participants also observed that it would be advantageous for Rubber Producers’ Societies, which market their produce as latex, to switch to sheet making considering the price differential.
(Source: http://www.commodityonline.com/news/Markets-favourable-for-more-rubber-latex-exports-37340-3-1.html)




Thailand Asks Indonesia, Malaysia to Maintain Rubber Prices
FRIDAY, MARCH 18, 2011

The Thai government via the International Rubber Consortium has asked Indonesia and Malaysia to set minimum levels for rubber prices after Thailand announced a similar move, IRCo acting Chief Executive Yium Tavarolit said Thursday.
Yium said that the three IRCo member countries have agreed to work together on any potential price-control measures.
Thailand Monday pledged to maintain local rubber prices at no less than THB120 a kilogram, amid a sharp slide in prices from record highs in February.
Yium said that agricultural authorities in Thailand will meet this week to discuss the issue of the price controls before contacting Indonesia and Malaysia.
Thailand, Indonesia and Malaysia account for about 70% of global natural rubber production.
(Source: http://www.irco.biz/BlogMoreDetial.php?id=2733&ShowContent=news)




Rubber market to rebound on favourable fundamentals
FRIDAY, MARCH 18, 2011

PETALING JAYA: The natural rubber (NR) market is expected to rebound due to favourable fundamentals, said Malaysian Rubber Board (MRB) director-general Datuk Dr Salmiah Ahmad.
“The strong economic growth of China and India coupled with anticipated higher average oil prices in 2010, points towards demand for the NR industry.
“A higher level of NR price is expected especially in view of tight global supply and declining stocks that are currently affecting both the producers and consumers,” she said in a statement yesterday.
“Also, Thailand and Malaysia would be experiencing the delayed seasonal lull of wintering from March to April which will reduce output by some 30% to 40%.”
She said the MRB was “deeply concerned” with the decline in prices and the volatility of the rubber markets.
Compared with the peak, prices have declined by more than 31% with tyre-grade SMR (Standard Malaysia Rubber) 20 closing at RM11.83 per kg on Wednesday.
However, MRB’s noon official physical price for SMR 20 rose 63.5 sen to RM12.59 per kg yesterday while latex-in-bulk improved 10 sen to RM8.705 sen per kg.
The MRB statement quoted the Association of Natural Rubber Producing Countries as saying that the Japanese earthquake would have limited impact on global demand as there was no damage to plants owned by major firms in Japan such as Bridgestone Corp and Michelin.
Bloomberg reported yesterday that Thailand, Indonesia and Malaysia would probably delay exports to counter a price slump, quoting Yium Tavarolit, the acting CEO of the International Rubber Consortium Ltd.
(Source: http://biz.thestar.com.my/news/story.asp?file=/2011/3/18/business/8295407&sec=business)




Rubber in Tokyo jumpson Thai supply concerns
FRIDAY, MARCH 18, 2011


Bangkok: Rubber jumped the most in more than two years as supply tightened after the Thai government asked exporters to halt shipments and as Japanese tyre plants resumed production after last week's earthquake.
August-delivery futures climbed as much as 8.1 per cent, the most since January 5, 2009, to 399 yen (Dh18.62) a kilogram ($5,043 a metric tonne) on the Tokyo Commodity Exchange before trading at 398.6 yen at 2.15pm. The contract has surged 19 per cent from a four-month low of 335 yen on March 15 after Thailand's Deputy Prime Minister Suthep Thaugsuban asked exporters to suspend shipments to stem a plunge in prices and will ask banks to offer low-interest loans to help them stockpile the raw material.
"The Thai government intervention on exports is making rubber-sheet supply become tight, supporting the price," Kazunori Kokubo, general manager for the international business department at Yutaka Shoji Co said by phone from Tokyo.
Thailand, the largest producer, will negotiate with commercial banks to extend loans to exporters to buy unsmoked sheets from farmers at a minimum price of 120 baht ($3.96) a kilogram, said Suthep, who chairs the rubber policy committee.
The government will also encourage farmers not to sell below the minimum level, he said.
"The news provided positive psychological sentiment, prompting buyers to snap up the commodity," Pornthip Wongjirattikarn, marketing manager at Future Agri Trade Co., said by phone from Bangkok.
Free-on-board price
The free-on-board price, or cost without freight and insurance, for Thailand's benchmark ribbed smoked sheet gained for a second day, rising 3.6 per cent to 142.25 baht a kilogram boosted by the Thai government measures, according to the Rubber Research Institute of Thailand. Supplies have declined as the country entered low-production season, it said. The price reached a record 198.30 baht on February 21.
Rubber plunged from a record 535.7 yen reached February 18 as worsening Middle East tensions and slowing car sales in China, the largest buyer, raised concern that demand may decline. Losses intensified after the earthquake struck Japan, which is battling to prevent a meltdown at a stricken nuclear power plant.
"Demand in Japan is expected to recover after plants resume operations," Yutaka Shoji's Kokubo said.
Japan accounts for 7 per cent of global natural rubber demand. The closure of a handful of tyre plants in the country's northeast region for a few days won't impact global demand in a significant way, according to the Association of Natural Rubber Producing Countries. "If there is any marginal impact, it will be for the short-term only," the group said.
Operations resume
Bridgestone restarted three plants in Tochigi prefecture in eastern Japan yesterday, the company said in a faxed statement. Two of the plants will begin delivering tyres for cars, trucks and motorcycles from today, the company said. It closed the factories after the earthquake off the coast of Sendai, northern Japan on March 11.
Yokohama Rubber Co resumed partial production at five plants. A plant in Ibaraki prefecture damaged in the quake remains closed, the company said in a statement yesterday.
(Source: http://gulfnews.com/business/media-marketing/rubber-in-tokyo-jumpson-thai-supply-concerns-1.778706)




Thailand, Indonesia May Curb Rubber Exports to Stem Drop
FRIDAY, MARCH 18, 2011

Thailand, Indonesia and Malaysia, the world‟s biggest rubber growers, will probably
delay exports to counter a price slump as demand outpaces supply during the low
production period, according to a producers‟ group.
“If the price continues to fall, we will definitely do it,” Yium Tavarolit, the acting chief
executive officer of the International Rubber Consortium Ltd., said in a phone
interview today (Mar 17). “Representatives of the three countries agreed in principle
to temporarily delay the exports.”
Rubber has plunged 26 percent from a record 535.7 yen reached Feb. 18 as
worsening Middle East tensions and slowing car sales in China, the largest buyer,
raised concern demand may decline. The decline worsened after Japan‟s strongest
earthquake and on the risk of radiation from a damaged nuclear power plant.
Thailand, Indonesia and Malaysia will have to decide on a minimum price, Yium said.
The nations cut exports to combat a 56 percent price slump amid the global financial
crisis in 2009. “If the price stabilizes and moves in line with demand and
supply fundamentals, exporters will export as normal,” Yium said. The group
represents growers and exporters in the three nations and represents about 70
percent of global supply.
August-delivery futures climbed as much as 8.1 percent, the most since Jan. 5,
2009, to settle at 396.9 yen a kilogram ($5,043 a metric ton) on the Tokyo
Commodity Exchange today (Mar 17). The contract has rallied about 18 percent from
a four-month low of 335 yen on March 15 after Thailand‟s Deputy Prime Minister
Suthep Thaugsuban asked exporters to suspend shipments.
„No Panic Selling‟
The Indonesia Rubber Association today (Mar 17) said it has proposedthat a price of
$4 per kilogram should be defended and urged its members not to sell in a “panic.”
There is still a shortage because of wintering now in growing regions and potential
demand
from consumers and tire manufacturers is strong because of the U.S. economic
recovery and growth in China, it said.
Farmers in Thailand, Indonesia and Malaysia reduce tapping during so-called
wintering from February to May, when trees shed leaves and latex production drops.
Thai output declines as much as 60 percent compared with peak levels, according to
the Association of Natural Rubber Producing Countries.
Malaysia wants to see stable rubber prices, Deputy Plantation Industries &
Commodities Minister Hamzah Zainuddin said March 4. “Prices of rubber should be
around 12 ringgit to 15 ringgit and it‟s enough for everyone to make money.”
„Price Volatility‟
The three countries will work together with China Rubber Industry Association on
measures and a market mechanism to “reduce price volatility,” Yium said after a
meeting with representatives of growers and Chinese buyers. Setting up a regional
rubber market for forward trading is an option, he said.
“What happened to Japan doesn‟t change demand and supply fundamentals, but
affects sentiment prompting investors to seek safe-haven assets,” Yium said.
Japan‟s earthquake on record and a seven-meter high tsunami last week caused
power shortages, forcing car and tires makers to halt production and threatening the
economic recovery.
Natural rubber output may grow by 6.2 percent this year and by 6.5 percent next
year, while demand is estimated to gain by 4.6 percent this year and by 3.8 percent
next year, the International Rubber Study Group said March 11, without providing a
tonnage forecast.
(Bloomberg, March 17, 2011)