Rubber Gains To 5-Week High On Tight Supply During Thai New Year

Rubber Gains To 5-Week High On Tight Supply During Thai New Year
MONDAY, APRIL 11, 2011

Rubber climbed to the highest level in five weeks on concerns that supply will tighten during New Year holidays in Thailand, the largest exporter. The September-delivery contract advanced as much as 3.9 percent to 481.9 yen a kilogram ($5,688 a metric ton), the highest level since March 3, and traded at 472.1 yen at 2:12 p.m.on the Tokyo Commodity Exchange. The most-active contract gained 8.5 percent last week, the most since Nov. 5.
“Supply will stop temporarily during Thai New Year festival,” said Hiroyuki Kikukawa, general manager of research at IDO Securities in Tokyo. Government agencies and banks will be closed during April 13-15 in Thailand. Rising crude oil prices and a decline in China’s rubber stockpiles are also supporting prices, said Kikukawa. Natural-rubber inventories fell for a ninth week, down 5,645 tons to an eight-month low of 21,966 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said Friday (Apr 8). China’s natural-rubber imports were 210,000 tons in March, compared with 110,000 tons in February and 190,000 tons in March 2010, customs data showed yesterday (Apr 10). Inbound shipments declined about 4 percent to 470,000 tons in the first three months from 490,000 tons a year ago, customs said on its website on April 10.
Thai Supply
“Supply availability is limited following floods in the country’s southern provinces, providing positive sentiment to the market,” Navarat Kaewpratarn, a senior marketing official at Future Agri Trade Co. said by phone from Bangkok. Supply in Thailand declined after floods in southern provinces damaged plantations. Flooding in 10 southern provinces of Thailand has killed 58 people and affected 2 million, the Department of Disaster Prevention & Mitigation said in a statement on its website. About 50,000 rai (19,641 acres) of rubber plantations have been damaged. Oil advanced for a fourth day in New York as NATO escalated its air campaign over Libya and on concern unrest may spread to other energy-exporting countries in the Middle East. Crude oil for May delivery gained as much as 67 cents to $113.46 a barrel in electronic trading on the New York Mercantile Exchange today (Apr 11). The physical price of Thai rubber climbed 0.4 percent to 184.80 baht ($6.15) a kilogram today (Apr 11), according to the Rubber Research Institute of Thailand. Supply remained low in southern Thailand as some plantations are still inundated, disrupting latex tapping, it said.
Rubber for September delivery gained as much as 3.6 percent to 37,985 yuan ($5,811) a ton on the Shanghai Futures Exchange before trading at 37,130 yuan at the midday break.
(Bloomberg, April 12, 2011)




Tokyo Futures Rise 3 Pct On Commodity Rally
MONDAY, APRIL 11, 2011

Key Tokyo rubber futures rose more than 3 percent on Monday (Apr 11), drawing support from a rally in other commodities markets late last week.
FUNDAMENTALS
The key Tokyo Commodity Exchange rubber contract for September delivery rose as high as 481.9 yen per kg after the open, up 18.1 yen or 3.9 percent from Friday's (Apr 8) settlement of 463.8 yen. That was the highest for a benchmark contract since March 3.
The contract last week posted its biggest weekly increase since the week ending on March 18.
Tokyo rubber futures were expected to stay firm and were likely to rise further on the back of supply tightness at a time when demand remains strong, a Reuters poll showed on Friday (Apr 8).
The most active Shanghai rubber contract for September delivery rose 890 yuan to close at 36,680 yuan ($5,606) per tonne on Friday (Apr 8). Volume picked up to 581,410 lots from Thursday's 448,114 lots.
U.S. crude futures rose above $113 a barrel on Monday (Apr 11), their highest since September 2008, as a weak dollar continued to support a recent rally in commodities. Oil also drew extra support from fears that the war in Libya was starting to inflict lasting damage on the oil sector.
The yen stayed on the backfoot early in Asia on Monday (Apr 11), while the dollar struggled against other currencies as investors continued to pile on carry trades in favour of higher-yielding assets.
(Reuters, April 11, 2011)



NMCE Rubber surges on fresh buying
MONDAY, APRIL 11, 2011

NMCE rubber futures traded positive on active fresh buying on lower level on Saturday. TOCOM futures market also witnessed positive trend and September futures settled at ¥463.70 per Kg on Friday. Domestic spot market witnessed small recovery on Saturday. Thus, on cues from overall market trend prices at NMCE platform ended the day on positive note.
The rubbers futures are projected to continue the gains on follow through buying on Monday. TOCOM September futures are trading higher at ¥479.0 per Kg. on lower level buying. Limited supply from Thailand due to New Year holiday might support the prices international market. However, domestic Indian rubber market has again fallen on Sunday which might limit the gains.
Factors to Watch For
Thai market will be closed from April 13 to 15th due to Thai New year. Therefore supply might remain tight in world rubber market
According to Bloomberg sources, China’s natural-rubber imports were 210,000 tons in March, compared with 110,000 tons in February and 190,000 tons in March2010
Floods in Thailand, world’s largest exporter have impacted the supply of commodity used in tyres and rising crude oil prices are also supporting the rubber prices
According to Department of Disaster Prevention & Mitigation, around 19,641 acres of rubber plantations have been damaged in Thailand due to heavy flood
According to the Rubber Research Institute of Thailand, physical price of Thai rubber gained 0.5 percent to 184 baht ($6.12) a kg. Friday
As per deputy head of the China Rubber Industry Association, Natural-rubber demand in China, the biggest consumer, will rise 8% this year. 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
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE May contract, prices and open interest are rising while volumes are declining. Market is attracting late buyers & early shorts; market is vulnerable to a sharp correction but likely that that correction will be bought creating a buy point for uptrend.
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 forward.
Shanghai Futures (SHFE)
The SHFE active July contract, prices, volumes are rising while open interest is falling. Market has a lot of traders initiating from both sides but larger traders may be liquidating into the higher prices. The market may be vulnerable to large price swings as shorter time frame traders attempt to trade from both sides of the market but liquidating before end of- day. Often signals of a market turn near-term or continued volatility.
Courtesy: Karvy Commtrade Ltd.




China rubber imports swell 90.9% in March
MONDAY, APRIL 11, 2011

BEIJING (Commodity Online): China’s rubber imports in March surged 90.9% month-on-month to touch 210,000 tons, reported webstock.com.cn, citing the General Administration of Customs in China.
This is a rise of 10.5% Y-O-Y.
But total imports of rubber in the first three months declined 4.6% Y-O-Y to reach 470,000 tons.
Synthetic rubber imports in March jumped 68.9 percent month-on-month and in comparison with the period a year back registered a decline of 15.6 percent to 154,092 tons.
Synthetic rubber imports fell 10.2 percent year-on-year to 385,037 tons during the first three months.




Nitrile Rubber Market To Reach 645kt By 2017 - Study
MONDAY, APRIL 11, 2011

The global market for Nitrile Rubber (NBR) is projected to exceed 645 thousand tons by the year 2017, according to a new report. Key factors driving the market include the increasing industrialisation and development of infrastructure projects and automobile industry in the emerging economies of Asia-Pacific, Middle East and Latin America.
Global Industry Analysts has published a new report titled, NITRILE BUTADIENE RUBBER (NBR) - A Global Strategic Business Report. The 180-page report was first published in April 2011 and is available for a price of around USD4600, depending on delivery options.
The publishers say, "The industry faced severe after-effects of the global economic slowdown that began in late 2007 and assumed debilitating proportions in 2008 and 2009. A key reason for the collapse in NBR demand was attributable to the downslide in automobile production as a result of fall in automobile sales, primarily in high-income countries. The severely hit construction sector also led to a significant drop in demand for NBR. In addition, the soaring prices for feedstock butadiene forced companies to cut down on NBR production. The effect of the increase in prices of the feedstock was also intensified by the weakening dollar."
(European Rubber Journal, April 8, 2011)




China March Natural Rubber Imports 210,000 Tons
MONDAY, APRIL 11, 2011

China’s natural rubber imports were 210,000 metric tons in March, according to a customs agency statement posted on its website today.



Spot rubber prices improve
MONDAY, APRIL 11, 2011


KOTTAYAM, APRIL 9:
Domestic rubber prices improved on Saturday. On the spot, prices firmed up mainly on covering purchases following the moderate gains on the National Multi Commodity Exchange.
Sheet rubber closed firm at Rs 241 (239) a kg, according to traders. The weekend session ended on a positive note giving hope for a better opening on Monday.
FUTURES GAIN
In futures, the April series improved to Rs 241.60 (238.88), May to Rs 249 (246.21), June to Rs 253.49 (250.16), July to Rs 254 (251.50), August to Rs 248.39 (242.01) and September to Rs 243.50 (242.27) a kg on the NMCE.
Spot rates were (Rs/kg): RSS-4: 241 (239); RSS-5: 238 (235.50); ungraded: 234 (231); ISNR 20: 235 (234) and latex 60 per cent: 142 (140).