THURSDAY, MARCH 10, 2011
Bloomberg News (Tokyo) - Rubber slumped by the most in more than 10 months as selling accelerated on concern a decline in China car sales may weaken demand for the raw material used to make tires in the world's largest consumer.
The August-delivery contract lost as much as 8.7 per cent to settle at 416.5 yen a kilogram, the lowest level since December 30. That was the biggest fall since April 2010.
"It's panic selling," Sureerat Kunthongjun, an analyst at Agrow Enterprise Ltd, said by phone from Bangkok.
"Investors cashed out on fears that prices will fall further, while demand for Thai rubber has subsided."
Speculation
Officials are investigating the cause of the slump, Norikazu Takei, a Tocom spokesman said by phone from Tokyo. Rubber surged to a record 535.7 yen on February 18 on speculation supply will fall short of demand, led by China's vehicle sales.
Sales of passenger cars and minivans declined 0.4 per cent from a year earlier to 880,027 last month, the China Passenger Car Association said yesterday.
Sales dropped for the first time since at least September 2009 after fuel prices rose and the government ended incentives supporting vehicle sales.
"The sales decline raised concerns that rubber demand may slow," Kazunori Kokubo, general manager at Tokyo-based broker Yutaka Shoji Co, said yesterday by phone. High oil prices threaten global economic growth and may slow demand for tires, he added.
Car-sales growth in China will be about 10 per cent to 15 per cent this year, the China Association of Automobile Manufacturers said on January 10.
Total auto sales, which include cars, trucks and buses, jumped 32 per cent last year to 18.06 million, according to the group.
Market sentiment
"Chinese car sales may not grow as much as earlier expected, given rising fuel costs and the nation's monetary tightening," Hisaaki Tasaka, an analyst at broker ACE Koeki Co in Tokyo, said yesterday by phone.
China raised the sales-tax rate on small cars this year to 10 per cent from 7.5 per cent, phased out subsidies for vehicle trade-ins in rural areas, and increased retail gasoline and diesel prices on February 21.
Lower taxes helped automakers including General Motors Co and Volkswagen AG increase deliveries last year as overall vehicle sales surged 32 per cent in the world's largest auto market to a record 18.06 million.
Borrowing costs
"We believe market sentiment is changing due to rising gas prices, higher borrowing costs and overall tightening in the economy," Scott Laprise, a Beijing-based analyst at CLSA Asia Pacific, said in a March 3 report.
Crude for April delivery traded at $104.15 a barrel in New York.
Yesterday, the contract gained to $105.44, the highest settlement since September 26, 2008, amid concern that unrest in the Middle East and North Africa may disrupt supplies.
Demonstrations have toppled leaders in Tunisia and Egypt and there have been protests in countries including Iran, Yemen and Oman.
In Saudi Arabia, the biggest oil producer in the Organisation of Petroleum Exporting Countries, websites have called for a nationwide "Day of Rage" on March 11 and March 20, according to Human Rights Watch.
In Shanghai, May-delivery rubber slumped by the 6 per cent daily limit to 36,035 yuan ($5,487) a tonne and closed at 36,205 yuan.
The physical price of Thai rubber fell 1.9 per cent to 177.50 baht ($5.84) a kilogram because buyers have slowed purchases awaiting lower prices, while traders continue releasing rubber from stockpiles amid concerns that prices will continue to fall further, according to the Rubber Research Institute of Thailand.
The price reached a record 198.30 baht on February 21.
Natural Rubber Prices May Not Fall Sharply For Rest of 1H
THURSDAY, MARCH 10, 2011
10 March 2011
Natural rubber prices are unlikely to fall sharply for the remainder of the first half of 2011 after intense declines recently, the acting chief executive of the International Rubber Consortium, Yium Tavarolit, said Thursday.
"Natural rubber prices had risen beyond market fundamentals in the last few months, so investors want to take profit now as it is a suitable time to liquidate long positions due to geopolitical violence in the Middle East causing them to look for safe havens," said the Bangkok-based Yium.
Benchmark natural rubber futures on the bellwether Tokyo Commodity Exchange rose to a record high of Y535.7 a kilogram on Feb. 18 in an extended rally that saw prices hitting successive record highs from December before falling sharply in the last two weeks. Many in the trade, including Yium, attributed the rise to excessive speculation.
Sentiment then turned negative after tension in the Middle East damped risk appetite and cast doubts on economic growth in the face of high oil prices.
The benchmark August Tocom rubber contract was trading at Y417.1/kg at 0540 GMT.
Prices fell 8.7% Tuesday and as much as 3.7% Wednesday.
"I don't know if prices have bottomed out, but I don't expect rubber prices falling sharply again in the first half of the year," said Yium, who is also chief secretary and economist at IRCo.
"In the history of the rubber market, we have never seen prices falling in the first or second quarters of the year."
Yium said supply-demand fundamentals are firm with major producing countries entering the low-production season, and with the global economy in relatively good shape.
Vietnam Pours Millions In Rubber Tree Investment In Laos
THURSDAY, MARCH 10, 2011
VIENTIANE (Laos), March 10 (Bernama) -- The Dac Lat Rubber Company Limited of Vietnam has decided to spend more than US$50 million on rubber tree plantation and construction of a rubber processing factory to produce latex for export, Lao news agency (KPL) reported.
Deputy Director of the Dac Lat Rubber Company Limited, Nguyen Ngoc Ngyen has recently disclosed that presently rubber trees have been planted on almost 9,000 hectares and the company will continue to expand more in the future.
Meanwhile, the construction of a rubber processing factory is now under way and expected to complete in mid-2011 and the export of latex sheets will come at the end of this year, he said.
The factory with production capacity of 6,000 tonnes per year is located in Champassak province.
In the future, the company plans to build two more factories in southern provinces of Laos, with a combined production capacity of 6,000-10,000 tonnes yearly.
Ngyen further stated that the assessment of Vietnam's Rubber Association has found that rubber was in high demand on the world market till 2015.
There were many reports from the World Rubber Associations unveiling that the consumption of rubber is approximately 5 kg per person. But the rubber supplying is only 2 kg per person, proving that the world market still demands a huge volume of rubber.
"This is a good opportunity for our company to expand the rubber tree plantation and build more factories," said Ngyen.
He added that the Dac Lat Rubber Company Limited would focus on export the sheets of latex to US, European and Western markets.
The company started its rubber tree plantation in Laos in 2005.
Tokyo rubber futures extend losses
THURSDAY, MARCH 10, 2011
Bangkok (march 10, 2011) : tokyo rubber futures extended losses on wednesday and dropped to their lowest level in more than two months on weaker oil prices, but bargain hunting offered some support. the benchmark rubber contract on the tokyo commodity exchange for august delivery fell 4.1 yen to settle at 412.4 yen ($4.99) per kg.
it plunged as much as 3.7 percent to an intraday low of 401.0 yen, the lowest since december 20, 2010. the contract had slumped nearly 9 percent to 416.5 yen per kg on tuesday. it hit a record high of 535.7 yen hit in mid-february. "prices finally rebounded after finding a major support level at 400 yen per kg," said a singapore-based trader. the most active shanghai rubber contract for may delivery rose 165 yuan to settle at 36,370 yuan per tonne.
tocom prices may rally on thursday after the support at 400 yen held, dealers said. the declines in tokyo futures, which also dragged down physical prices, raised concerns of a repeat of defaults and cancellations which shocked the physical market a few years ago.
Selling pressure squeezes spot rubber
THURSDAY, MARCH 10, 2011
KOTTAYAM, MARCH 9:
Physical rubber prices continued to remain under pressure on Wednesday. The market opened weak and fell further on selling from dealers and growers following the declines in domestic futures on early trades. But it failed to regain the losses fully in tune with the late recovery on the NMCE. According to sources, there were no buyers on RSS 4 at lower levels and the grade hit Rs 215 a kg in the morning session.
Sheet rubber surrendered to Rs 216.50 (220) a kg according to traders. The grade weakened to Rs 216 (222) a kg both at Kottayam and Kochi as reported by the Rubber Board.
In futures, the March series recovered to Rs 219.70 (213.66), April to Rs 227.31 (220.89), May to Rs 232.56 (225.03), June to Rs 236.49 (227.88) and July to Rs 237.90 (228.87) a kg for RSS 4 on the National Multi Commodity Exchange (NMCE).
RSS 3 (spot) nosedived to Rs 248.59 (263.39) a kg at Bangkok. The March futures declined to ?447 (Rs 242.87) from ?462 during the day session and then to ?444 (Rs 241.24) a kg in the night session on the Tokyo Commodity Exchange (TOCOM).
Spot rates were (Rs/kg): RSS-4: 216.50 (220); RSS-5: 214 (217); ungraded: 213 (215); ISNR 20: 214 (218) and latex 60 per cent: 130 (133).
Natural rubber down by Rs 6 to Rs 216/kg
WEDNESDAY, MARCH 9, 2011
Natural rubber (NR) prices today fell by Rs six to Rs 216 per kg in the domestic market due to high volatility in the international physical markets and low inventories.
The rate of NR yesterday at the domestic physical market was Rs 222 per kg, according to the Rubber Board data.
"The prices of NR in domestic physical markets follow the international market trends, which have witnessed heavy fall," Indian Rubber Dealers Association President George Valy said.
The prices of NR at the Bangkok spot market witnessed a fall of almost Rs 15 to Rs 248.59 per kg today as against Rs 263.39 per kg yesterday.
"The prices in the international markets have been affected by high volatility in the future markets abroad and because of drop in demand from China, a major consumer of NR," Valy added.
Valy said as March is the last month of the financial year, business houses on account of year ending are keeping low inventories.
"The sharp fall in the NR rates since the last two days is because of speculation in the domestic as well as international future markets," Cochin Rubber Merchants Association Advisor N Radhakrishnan said.
Radhakrishnan said with tapping almost over, which indicates production is on the decline, the prices should actually go up but on the contrary there is a slide in the rates.
Automotive Tyre Manufacturers' Association Secretary General Rajiv Budhiraja, attributed the fall in the prices of NR to volatility in the future markets and slowdown in consumption in China.
"Prices have also been affected due to the financial year ending coming near as business houses during this time carry minimal stocks," Budhiraja added. This is the second major fall in the domestic spot prices of NR this month.
NR prices witnessed a fall of Rs 5 to Rs 222 per kg on March 8 as against Rs 227 per kg on March 7.
Rubber Slumps 8.7% On Weak China Car Sales
WEDNESDAY, MARCH 9, 2011
Rubber slumped by the most in more than 10 months as selling accelerated on concern a decline in China car sales may weaken demand for the raw material used to make tires in the world's largest consumer.
The August-delivery contract lost as much as 8.7 per cent to settle at 416.5 yen a kilogram, the lowest level since December 30. That was the biggest fall since April 2010.
"It's panic selling," Sureerat Kunthongjun, an analyst at Agrow Enterprise Ltd, said by phone from Bangkok.
"Investors cashed out on fears that prices will fall further, while demand for Thai rubber has subsided."
Speculation
Officials are investigating the cause of the slump, Norikazu Takei, a Tocom spokesman said by phone from Tokyo. Rubber surged to a record 535.7 yen on February 18 on speculation supply will fall short of demand, led by China's vehicle sales.
Sales of passenger cars and minivans declined 0.4 per cent from a year earlier to 880,027 last month, the China Passenger Car Association said yesterday (Mar 8).
Sales dropped for the first time since at least September 2009 after fuel prices rose and the government ended incentives supporting vehicle sales.
"The sales decline raised concerns that rubber demand may slow," Kazunori Kokubo, general manager at Tokyo-based broker Yutaka Shoji Co, said yesterday (Mar 8) by phone. High oil prices threaten global economic growth and may slow demand for tires, he added.
Car-sales growth in China will be about 10 per cent to 15 per cent this year, the China Association of Automobile Manufacturers said on January 10.
Total auto sales, which include cars, trucks and buses, jumped 32 per cent last year to 18.06 million, according to the group.
Market sentiment
"Chinese car sales may not grow as much as earlier expected, given rising fuel costs and the nation's monetary tightening," Hisaaki Tasaka, an analyst at broker ACE Koeki Co in Tokyo, said yesterday (Mar 8) by phone.
China raised the sales-tax rate on small cars this year to 10 per cent from 7.5 per cent, phased out subsidies for vehicle trade-ins in rural areas, and increased retail gasoline and diesel prices on February 21.
Lower taxes helped automakers including General Motors Co and Volkswagen AG increase deliveries last year as overall vehicle sales surged 32 per cent in the world's largest auto market to a record 18.06 million.
Borrowing costs
"We believe market sentiment is changing due to rising gas prices, higher borrowing costs and overall tightening in the economy," Scott Laprise, a Beijing-based analyst at CLSA Asia Pacific, said in a March 3 report.
Crude for April delivery traded at $104.15 a barrel in New York.
Yesterday (Mar 8), the contract gained to $105.44, the highest settlement since September 26, 2008, amid concern that unrest in the Middle East and North Africa may disrupt supplies.
Demonstrations have toppled leaders in Tunisia and Egypt and there have been protests in countries including Iran, Yemen and Oman.
In Saudi Arabia, the biggest oil producer in the Organisation of Petroleum Exporting Countries, websites have called for a nationwide "Day of Rage" on March 11 and March 20, according to Human Rights Watch.
In Shanghai, May-delivery rubber slumped by the 6 per cent daily limit to 36,035 yuan ($5,487) a tonne and closed at 36,205 yuan.
The physical price of Thai rubber fell 1.9 per cent to 177.50 baht ($5.84) a kilogram because buyers have slowed purchases awaiting lower prices, while traders continue releasing rubber from stockpiles amid concerns that prices will continue to fall further, according to the Rubber Research Institute of Thailand.
The price reached a record 198.30 baht on February 21.
(Gulfnews.com, March 9, 2011)
Rubber market set for correction
WEDNESDAY, MARCH 9, 2011
The Malaysian rubber market is expected to undergo a technical correction next week after its recent gains.
Investors are also expected to take a breather from the market as the commodity has risen to unrealistic levels.
The market will continue to be affected by the escalating unrest in Libya and surging oil prices that have contributed to the lack of buyers enthusiasm for the commodity, dealers said.
"Prices will remain on the downside and succumb to selling pressure," a dealer said, adding that some investors preferred to be neutral and sit on the sidelines, for prices to retreat.
On a week-to-week basis, the Malaysia Rubber Board (MRB) physical price for tyre-grade SMR 20 declined 74.5 sen to 1,557.5 sen per kg from 1,632 sen per kg last registered last Friday.
Latex-in-bulk declined 28 sen to 1,064 sen from 1,092 sen previously.
Meanwhile, MRB's official price for tyre-grade SMR 20 fell 77.5 sen to 1,550.5 sen per kg from 1,628 sen per kg.
Latex-in-bulk fell 32.5 sen to 1,059 sen per kg from 1,091.5 sen per kg registered last Friday. – Bernama
Natural rubber production up by 6% in Feb
WEDNESDAY, MARCH 9, 2011
NEW DELHI: India's natural rubber production increased by nearly six per cent to 54,500 tonnes during the last month, according to Rubber Board data released today.
The country had produced 51,500 tonnes of natural rubber in February 2010.
The consumption increased to 79,000 tonnes in February 2011 from 76,350 tonnes in the year-ago period.
While the import of natural rubber fell to 6,831 tonnes from 12,278 tonnes, the export increased to 6,523 tonnes from 5,556 tonnes during the period under review.
In the first 11 months of the current fiscal, natural rubber production has increased by three per cent to 8.04 lakh tonnes and consumption rose by 1.9 per cent to 8.68 lakh tonnes.
Imports and exports went up during April-February period of 2010-11 compared to the corresponding period of the previous fiscal.
Natural rubber's imports advanced to 1.71 lakh tonnes from 1.
Tokyo futures fall further, but find support
WEDNESDAY, MARCH 9, 2011
BANGKOK, March 9 - Tokyo rubber futures continued to fall on Wednesday as weaker oil prices triggered stop-loss selling, but prices bounced up from support at around 400 yen per kg, dealers said.
* The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for August delivery fell 4.1 yen to settle at 412.4 yen per kg. It fell as much as 3.7 percent to an intraday low of 401.0 yen, the lowest since Dec. 20.
* The contract had slumped nearly 9 percent to 416.5 yen per kg on Tuesday. That compares with the record high of 535.7 yen hit in mid-February.
* "Prices finally rebounded after finding a major support level at 400 yen per kg," said a Singapore-based trader.
* The most active Shanghai rubber contract for May delivery
* Brent crude dropped for a third day, dipping below $113 after reassurances from OPEC members of ample spare capacity eased anxiety about export losses from Libya, Africa's third-largest oil producer. [O/R]
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