Tokyo futures rise 2 pct as oil recovers (Aug 10)

Tokyo futures rise 2 pct as oil recovers (Aug 10)
August 10, 2011





TOKYO, Aug 10 (Reuters) – Key Tokyo rubber futures rose more than 2 percent on Wednesday, as sentiment improved with a recovery in oil prices and stock markets, but worries about the global economic outlook kept investors cautious about chasing up prices.

FUNDAMENTALS

* The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for January delivery jumped as much as 8.6 yen or 2.5 percent to 364.1 yen per kg in early trade.

* The previous day, it had fallen as much as 6 percent to an intraday low of 348.0 yen per kg, the lowest since June 29 on Tuesday.

* The most active Shanghai rubber contract for January fell 9.5 yuan to settle at 32,785 yuan ($5,094) per tonne on Tuesday.

* Brent crude rose more than $2 in early Asian trade on Wednesday, extending the previous session’s gains, as the U.S. Federal Reserve promised to extend near-zero interest rates for two more years.

* The U.S. dollar stayed under pressure in Asia on Wednesday, having slumped after the Federal Reserve’s extraordinary vow to keep rates near zero for two years, reaffirming the greenback’s status as a funding currency of choice for carry trades.

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MARKET NEWS

* Global oil demand will grow less than previously projected this year, according to forecasts on Tuesday from the U.S. and OPEC, as a worsening economic outlook will curb consumption in developed countries.

* The Nikkei share average rose more than 2 percent Wednesday after the Federal Reserve’s pledge to keep rates near zero for another two years sparked a rally in U.S. stocks.

* U.S. stocks rallied on Tuesday in a volatile session as investors struggled to decipher the Fed’s signals on the economy after a dizzying two-week slide.






Japan Rubber Stocks at 10-Month Low by July 20
August 8, 2011





Japan’s crude rubber inventories fell 3 percent in the period to July 20 from 10 days earlier to their lowest in about 10 months, industry data showed on Friday, reflecting tighter supply.

Rubber Trade Association of Japan numbers showed that crude rubber inventories as of July 20 stood at 6,160 tonnes, the lowest since Sept. 10, 2010, when inventories were at 5,776 tonnes.

But the July 20 level was more than double the amount in the same period a year ago, when inventories hit a record low of 2,628 tonnes.

Rubber stocks have been falling steadily as persistently high prices in producing countries put rubber futures prices on the Tokyo Commodity Exchange at a discount to physical prices, making shippers reluctant to deliver cargoes to Japan.







TOCOM Rubber Seen At 390 Yen/Kg by End-August
August 8, 2011




The prospect of strong demand in the second half of the year from Asian car-producing countries is likely to push Tokyo rubber futures higher in August but concern about the state of the world economy could limit the gains, traders said.

The benchmark sixth-month rubber contract on the Tokyo Commodity Exchange, currently January 2012, was forecast to be at 390.0 yen per kg by the end of August, according to the median forecast of 10 analysts polled by Reuters.

That was slightly higher than the actual closing price at the end of July of 386.5 yen, but well above a forecast of 350 yen in a previous poll at the end of June.

The latest poll was conducted this week. Stock and commodity markets have slumped in the past few days because of growing concern about the U.S. economy and the spreading euro zone debt crisis.

The TOCOM benchmark was at 380.8 yen at 0506 GMT on Friday (Aug 5), down around 2.5 percent on the day.

“Car industries in Japan are likely to accelerate in the second half to offset falls in output caused by the earthquake, while demand elsewhere in Asia, especially India, should rise further,” said a trader in Thailand’s Hat Yai rubber centre.

The Indian unit of Japanese car maker Nissan Motor, for example, is aiming to triple sales to 40,000 vehicles by the end of this fiscal year, helped by the launch of its new mid-sized sedan.

India, the world’s second-biggest rubber consumer, is likely to import a record 200,000 tonnes of natural rubber in the year ending March 31, 2012 as tyre makers cash in on lower customs duties.

“Rubber stocks in Japan are still low and that could reflect strong demand there,” said a Tokyo-based trader.

Japan’s crude rubber inventories fell 3 percent in the 10 days to July 20 to their lowest in about 10 months, according to the Rubber Trade Association of Japan’s data.

As for supply, traders do not expect a significant rise even though major rubber-producing countries are in their tapping season. Weather in Thailand, the biggest exporter, is hard to predict in August and September when seasonal storms can bring heavy rain liable to disrupt tapping and transport.

Tropical storm Nock-Ten hit the north of Thailand this week and earlier than usual rain has hit the south, the main rubber area.

With limited supply in prospect, the poll forecast that TOCOM prices would rise further to 400 yen per kg by the end of September, although uncertainty about the global economy may put that level in doubt in coming weeks.

The spread of forecasts was wide, running from 350 to 420 yen per kg.

On the physical front, rubber prices were expected to stay at a relatively firm level, at a time when supply may be limited, dealers said.

The benchmark Thai smoked rubber sheet was forecast to be at $4.65 per kg at the end of August, little changed from $4.80 at the end of July, according to the poll. It was still at $4.80 on Friday (Aug 5).




Indonesia: Rubber Industry Worried US Woes May Hit Exports
August 9, 2011





Indonesian shipments of rubber to the United States may decline as demand slows following a possible slowdown in economic growth, an industry representative has said.

“I haven’t figured out the impact on our rubber exports, but surely it will cause the price of rubber to decline,” said Suharto Honggokusumo, executive director of the Indonesian Rubber Association (Gapkindo), told reporters on Tuesday. “I just found out that the rubber price in Japan has fallen.”

The United States and China, the two largest economies in the world, are the biggest consumers of Indonesian rubber. Last year, Indonesia sold 546,500 tons of rubber to the United States, accounting for 23.2 percent of total overseas sales. Indonesia sold a total 2.35 million tons of rubber last year. This year, Gapkindo forecasts exports reaching 2.5 million tons, an increase of 6.4 percent.

Worries about the US economic slowdown have been building since it was reported growth had been far weaker in the first half of 2011 than economists expected. Intensifying concerns were reports showing that the manufacturing and services industries barely grew in July, offsetting news that jobs growth had been better than expected.

Standard & Poor’s on Friday downgraded its rating for US sovereign debt by one notch from AAA to AA+, and that heightened concerns that the economy would slip back into recession.

According to data from Indonesia’s Trade Ministry, the price of rubber has fallen 2 percent this week to 468 Singapore dollars per kilogram for September delivery. It said the decline was prompted by lower crude oil prices, which dropped more than 6 percent on Monday in New York.

Deddy Saleh, the ministry’s director general of foreign trade, confirmed the price drop.

“The rupiah’s appreciation against the dollar also triggered the rubber price to fall,” he said. “The rupiah is getting strong, so it has been bad for exporters.”

The rupiah has gained 5.3 percent this year and traded at 8,540 against the dollar on Tuesday.

Deddy said the US slowdown might also hamper other exports. “We need extra efforts to sell coffee and rubber to America, and we have to find alternative markets,” he said without elaborating.