Rubber Tumbles to Lowest in Three Months After Quake Hits Japan

Rubber Tumbles to Lowest in Three Months After Quake Hits Japan
FRIDAY, MARCH 11, 2011

March 11 (Bloomberg) -- Rubber extended a slump to the lowest level in almost three months after an 8.9-magnitude earthquake struck Japan, spurring concerns the disaster may hurt the economy and weaken demand.
The August-delivery contract plunged to 383.5 yen a kilogram ($4,659 a metric ton), the lowest level for the most active contract since Dec. 13, in after-hours trading on the Tokyo Commodity Exchange. Trades are settled on Monday. The price lost 14 percent this week, the most since 2008, on concern higher fuel costs may slow the recovery and weaken car sales.
“It’s a major reaction after the earthquake,” Ker Chung Yang, an analyst at Phillip Futures Pte, said by phone from Singapore. The quake spurred selling amid worries over demand from China, the top user, after disappointing car sales, he said.
A tsunami swept away houses and vehicles near the coast of Japan’s Miyagi prefecture, north of Tokyo, NHK Television showed.
Asian stocks extended global declines after the U.S. Labor Department said more Americans filed jobless claims and on the quake. In Europe, Spain’s credit rating was cut to Aa2 by Moody’s Investors Service, which said the cost of shoring up the banking industry will eclipse government estimates. China reported a $7.3 billion trade deficit, the most in seven years.
“As data indicated a slowdown in the U.S. and Chinese economies, concern grew that raw-material demand may weaken,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said today by phone. “Rubber was sold heavily as its consumption depends largely on Chinese demand.”
Demand Concern
May-delivery rubber in Shanghai fell as much as 3.1 percent to 35,060 yuan ($5,332) a ton before ending at 35,195 yuan.
China’s exports rose 2.4 percent in February from a year before, the least since 2009, as Lunar New Year holidays disrupted shipments, and imports climbed 19.4 percent, customs bureau data showed. Central bank adviser Li Daokui said that the full-year trade surplus will shrink this year.
The U.S. Commerce Department said the deficit in goods and services increased 15 percent to $46.3 billion in January as a surge in imports led by costlier crude oil overshadowed record exports. The Labor Department said applications for first-time unemployment benefits rose by 26,000 to 397,000 in the week ended March 5.
Rubber in Tokyo reached a record 535.7 yen on Feb. 18 amid speculation that demand led by China’s car sales growth will outpace supply.
Car Sales
China’s passenger-car sales growth in February was the slowest in more than two years after the government ended vehicle-buying incentives and demand dropped during the week- long Lunar New Year holiday.
Sales of passenger cars including multipurpose and sport- utility vehicles increased 2.6 percent from a year earlier to 967,200 units last month, the China Association of Automobile Manufacturers said yesterday. That’s the slowest pace of growth since January 2009, when car purchases fell 7.8 percent.
The physical price of Thai rubber fell today for a seventh day, dropping 1.8 percent to 161.75 baht ($5.31) a kilogram amid concerns that tire demand may decline as overseas buyers delay purchases waiting for prices to weaken further, the Rubber Research Institute of Thailand said. The price reached a record 198.30 baht on Feb. 21.



NMCE Rubber ends down on global cues
FRIDAY, MARCH 11, 2011

NMCE rubber futures witnessed heavy volatility on Thursday. On opening itself prices started trading positive on extended buying. Domestic spot market also witnessed recovery in prices on active buying.
However, TOCOM futures traded down on overall bearish sentiments. Thus, on cues from international market NMCE futures reversed the trend and ended in red on profit selling on gains.
Nonetheless, data released by rubber board regarding lower year end stocks limited the huge losses.
The rubbers futures are projected to continue the losses on active selling on Friday.
TOCOM August rubber is also trading down at ¥408.30 per Kg on active selling. Thus, on cues from negative international market prices at NMCE plat form may trade on lower note. However, positive spot market activity might limit the losses.
Factors to Watch For
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 Association of Natural Rubber Producing Countries, Natural-rubber consumption in China and India may rise 9 percent to 3.6 million tons this year and 5.2 percent to 991,000 tons respectively
According to China Passenger Car Association, Sales of passenger cars and minivans declined 0.4 percent from a year earlier to 880,027 last month
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE March contract, prices, prices, volumes and open interest all are falling if the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions.
Japan Futures (TOCOM)
The TOCOM active August contract, prices, volumes and open interest all are falling if the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions.
Shanghai Futures (SHFE)
The SHFE active July contract, prices, volumes and open interest all are falling if the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions.



Tokyo Futures Tumble On Global Econ Worries
FRIDAY, MARCH 11, 2011

Tokyo rubber futures tumbled nearly 6 percent in early morning trade on Friday (Mar 11), with shares in the U.S. and Japan falling on worries about the global economy and unrest in Saudi Arabia.
FUNDAMENTALS
The benchmark rubber contract on the Tokyo Commodity Exchange for August delivery was down 5.5 percent, or 23 yen, at 393.8 yen ($4.8) per kg as of 0044 GMT, its lowest in about three months.
The benchmark, which hit a record high of 535.7 yen in mid-February on concerns about supply in the physical market, fell 9 percent on Tuesday (Mar 10) as worries grew about the global economy and oil prices rose. Heavy stop-loss selling was seen.
The most active Shanghai rubber contract for May delivery fell 180 yuan to settle at 36,190 yuan ($5,518) per tonne on Thursday (Mar 10).
Oil recouped most of its deep losses in late trade on Thursday (Mar 10) after reports of police firing on protesters in Saudi Arabia revived fears of further unrest in the world's top exporter.
The euro stayed on the backfoot early in Asia on Friday (Mar 11) after suffering its biggest one-day fall against the dollar in a month, and further losses may loom if a euro zone summit fails to soothe market nerves on sovereign debt.
Around 80 percent of farmers in Thailand, the world's biggest rubber producer, have stopped tapping as rubber trees are not producing latex during the dry season, resulting in tight supply. They normally resume tapping by late April.



JANUARY RUBBER OUTPUT UP 27.6 PCT
FRIDAY, MARCH 11, 2011

KUALA LUMPUR, March 11 (Bernama) -- Malaysia''s natural rubber (NR) output in January 2011 rose by 23,556 tonnes, or 27.6 per cent, to 108,787 tonnes from the previous month.
Year-on-year, output rose by only 0.3 per cent, the Statistics Department said in its rubber statistics summary released today.
It said the smallholding sector contributed 95 per cent of total production while the estate sector contributed five per cent.
On exports, it said 78,143 tonnes of NR were shipped in January 2011, which were down by 1,327 tonnes, or 1.7 per cent, when compared with the previous month but were higher by 8,584 tonnes, or 12.3 per cent, when compared with January last year.
NR imports in January 2011 amounted to 70,551 tonnes, an increase of 7,656 tonnes, or 12.2 per cent, over the previous month, but dropped by 3.5 per cent year-on-year.
Domestic consumption of NR in January 2011 was 33,950 tonnes, a decline of 2,635 tonnes, or 7.2 per cent, over December 2010.
Similarly, a decrease of 7,454 tonnes, or 18 per cent, was recorded when compared with the same month a year ago.
For January 2011, the total stocks of NR held were 177,434 tonnes, an increase of 34,986 tonnes, or 24.6 per cent, over the previous month but were lower by 17,545 tonnes, or nine per cent, year-on-year.
The average monthly price of latex concentrate in January 2011 was 997.38 sen, an increase of 5.6 per cent over December 2010 while year-on-year, it was 51.8 per cent.
The price of SMR 20 also showed a similar pattern, increasing by 11.6 per cent to 1,580.33 sen when compared with December 2010, while year-on-year it showed a substantial increase of 58.9 per cent. –



NR Prices Unlikely To Fall Significantly - Irco
FRIDAY, MARCH 11, 2011

The acting chief executive of the International Rubber Consortium, Yium Tavarolit said today (Mar 10) that rubber prices are unlikely to fall sharply for the remainder of the first half of 2011 after intense declines recently.
"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.
Benchmark natural rubber futures on the bellwether Tokyo Commodity Exchange rose to a record high of Y535.7 a kilogram on 18 Feb. 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.
ERJ published a report on 18 Feb arguing that Super-traders in South-East Asia are buying cuplump and stockpiling it, to manipulate themarket.
Prices on international rubber exchanges bounced a little overnight, from yesterday's (Mar 9) lows.
On Tokyo's TOCOM Exchange, prices for the six-month contract remained steady, closing at yen 414.5 ($5.00) per kilo on Thursday 10 March.
In Singapore, Sicom said short-dated RSS3 prices closed down over $0.25 at $5.18 on minimal trading, after falling as low as $5.12. Short-dated TSR 20 fell almost $0.05 to close at $4.48
India's NMCE prices were mixed, with March deliveries finishing unchanged at around Rs 220 ($4.88) per kilo
Shanghai Future Exchange eased somewhat, with the highest price recorded at yuan 37.3 ($5.76) per kilo for short-dated contracts, down slightly on yesterday's (Mar 9) numbers. Longer-dated contracts were priced around Yuan 36.
(Tyrepress.com, March 10, 2011)