Rubber to weaken on rising output, lower crude oil prices

Rubber to weaken on rising output, lower crude oil prices
August 18, 2011





KOCHI (Commodity Online): Rubber prices are set for further weakness on rising production in India, weak demand trends and falling Crude Oil prices.

Spot rubber prices for RSS 4 grade monitored by Rubber Board has fallen from Rs 20300 levels last week to 20,000 per 100 kg on Wednesday. At National Multi-Commodity Exchange (NMCE) Rubber september contract has opened trade on Thursday at Rs 19968 levels and is currently trading at Rs 19925 levels. The contract last closed at Rs 19895 levels on Wednesday.

Meanwhile, automobile sector demand has shown weakening trend as passenger car sales have dipped in July. Passenger car sales declined 15.76 per cent to 133,747 units, from 158,767 units a year earlier, according to the Society of Indian Automobile Manufacturers (Siam).The recent hike in interest rates, coupled with the increase in fuel prices, has affected the consumer sentiment negatively. With reports of meltdown in markets worldwide, customers are exercising caution and postponing purchase decisions

At TOCOM January-delivery contract is showing weakening trends at 362.3 Yen falling 0.1 percent at 13.55 hrs JST. The stronger Yen has also reduced the appeal of yen-denominated contracts, analysts said.

According to estimates, India’s Rubber production has risen 7% in July to 62,700 tonnes on good climatic conditions, rise in tapped area and higher prevailing prices in the previous months that boosted incenvtives for tapping by growers. Consumption has grown in July at 7.6% at 82,000 tonnes.







Prices skid
August 18, 2011





Economic worries: Rubber sheets being dried in sunlight at Nenmara near Palakkad, Kerala. Asian rubber settled mostly lower on Thursday on most exchanges, despite positive supply-and-demand cues, as macroeconomic jitters and concerns about the U.S. and European debt weighed heavily. Benchmark January natural rubber futures on the Tokyo Commodity Exchange settled ¥0.2 lower at ¥362.2 a kg.






Tokyo futures nearly flat, weak technicals weigh (Aug 18)
August 18, 2011



TOKYO, Aug 18 (Reuters) – Key Tokyo rubber futures settled nearly flat on Thursday, with investors lacking fresh incentives to break out of ranges and as worries about the yen’s strength and weak technicals weighed on sentiment.

The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for January delivery settled at 362.2 yen per kg, down 0.2 yen on the day.

The most active Shanghai rubber contract for January delivery fell 1 percent to close at 33,745 yuan ($5,283.305) per tonne. Volume rose to 670,662 lots from Wednesday’s 574,662 lots.

Japan’s Nikkei stock average fell for a second straight day on Thursday and dropped below the closely watched 9,000 line, hurt by the yen’s persistent strength and fears the United States might be heading for another recession, with many investors on the sidelines ahead of U.S. economic data.

The Swiss franc fell against the euro and the dollar on Thursday, with traders citing talk that the Swiss National Bank was adding liquidity via the currency forwards market.

The yen has also been hovering near record highs against the dollar, hurting the already fragile Japanese economy which is struggling to recover from the March 11 earthquake. A strong yen dampens sentiment as it deflates the value of yen-priced TOCOM rubber futures prices.

Senior finance ministry and Bank of Japan officials on Thursday met to exchange views on currency rates, the central bank said, a sign that Tokyo remains geared up for further action to stem persistent rises in the yen.

The rubber market has stayed below key technical levels over the past week, such as the 50-day moving average which on Thursday stood at 375.5 yen.

Worries about global growth weighed on commodities broadly.

Brent crude fell 0.2 percent on Thursday, staying below $111 a barrel on Thursday as ongoing concerns over Europe’s debt crisis and a firmer dollar drew investors away from riskier assets like oil and into the safe havens of gold and the Swiss franc.





Rubber Futures in Tokyo May Decline as Falling Oil Price Reduces Appeal
August 18, 2011



Rubber, little changed, may decline for a third day, as concerns over the debt crisis and falling crude oil prices reduced the appeal of the commodity used in tires and gloves.

The January-delivery contract declined as much as 0.4 percent to 360.8 yen a kilogram ($4,712 a metric ton) before trading at 362.3 yen a kilogram on the Tokyo Commodity Exchange at 11:25 a.m. local time.

Asian stocks fell for the first time in four days as the yen rose toward a post-World War II high and two Federal Reserve officials said they opposed a pledge to keep U.S. interest rates at record lows. Oil dropped from a two-day high in New York as investors speculated that increasing crude stockpiles in the U.S. indicate weaker fuel demand in the world’s biggest consumer of the commodity.

“Rubber moves in tandem with negative oil prices,” Ker Chung Yang, an analyst at Phillip Futures Pte, said by phone from Singapore. The stronger Japanese currency also reduced the appeal of yen-denominated contracts, he said.

Federal Reserve Chairman Ben S. Bernanke’s pledge last week to keep rates near zero until mid-2013 was “inappropriate policy at an inappropriate time,” Charles Plosser, president of the Fed Bank of Philadelphia, said yesterday in a Bloomberg radio interview. Dallas PresidentRichard Fisher said the central bank shouldn’t enact policy to protect stock investors. Both officials dissented from the Fed’s Aug. 9 statement.

Japan Exports

Japan’s exports fell more than expected in July as a global slowdown and a strengthening currency weigh on the outlook for the nation’s sales overseas. Exports decreased 3.3 percent in July from a year earlier, the Finance Ministry said today in Tokyo. The median estimate of 24 economists surveyed by Bloomberg News was for a 2.6 percent decline, after a 1.6 percent decrease in June.

The world’s third-largest economy is counting on an export revival to aid its rebound from the record earthquake in March. The yen’s 6 percent advance against the dollar in the past three months may weigh on overseas sales at a time when demand from major markets such as China and the U.S. is faltering. The yen traded at 76.54 per dollar. The currency’s postwar high is 76.25.

In Shanghai, rubber for January delivery dropped 0.6 percent to 33,910 yuan ($5,307) a ton on the Shanghai Futures Exchange. The cash price of Thai rubber remained unchanged at 139.30 baht ($4.66) a kilogram yesterday, according to the Rubber Research Institute of Thailand.







Spot rubber declines as buyers keep off


KOTTAYAM, AUG. 17:
Physical rubber prices declined on Wednesday. According to observers, the market remained under pressure on buyer resistance rather than selling from dealers or growers. ‘But we expect more of them to join the sellers queue in the days ahead as sheet rubber broke below the long term support level of Rs 200 a kg on late trades' they added.

Sheet rubber weakened to Rs 198 (200) a kg according to traders. The grade slipped to Rs 200 (201) a kg both at Kottayam and Kochi as per Rubber Board.

In futures, the September series closed at Rs 199.95 (198.60), October at Rs 198.40 (197.30), November at Rs 197.44 (197.50), December at Rs 198.50 (198), January at Rs 198 (200.50) and February at Rs 199.50 (201) a kg for RSS 4 on the National Multi Commodity Exchange.

The August futures improved to ¥355.9 (Rs 211.37) from ¥353 a kg during the day session but then remained inactive in the night session on the Tokyo Commodity Exchange. RSS 3 (spot) slipped to Rs 211.58 (211.88) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 198 (200); RSS-5: 193 (195); ungraded: 182 (185); ISNR 20: 195 (197) and latex 60 per cent 130 (130)