IRCo Sets Minimum Price For Natural Rubber

IRCo Sets Minimum Price For Natural Rubber
Written by HMH | September 28, 2011 | 0 |





28 September 2011

The International Rubber Consortium has set a “threshold price” for natural rubber under which the organisation will intervene in the market, IRCo’s Chief Secretary said Tuesday.

The intervention may include slowing exports from IRCO’s member countries–Thailand, Indonesia and Malaysia–which account for 70% of global natural rubber production, Yium Tavarolit said by phone from Bangkok.

Yium said that he isn’t to disclose the floor price.

IRCo is also writing to the agriculture ministries of its member countries seeking their endorsements for the price.

The consortium Monday advised the board members of its constituent countries to slow exports, amid panic selling that sent futures prices on the bellwether Tokyo Commodity Exchange 12% lower.

In March, the Thai government mandated a minimum price of THB120 a kiogram for USS3 raw material, while the Rubber Association of Indonesia, or Gapkindo, proposed a $4-a-kilogram “defend price.”

The moves came after the massive earthquake and tsunami that struck Japan which sent Tocom futures prices plunging 13% in a single day.





Rubber prices rebound on 27 September
Written by HMH | September 27, 2011 | 0 |





London — Rubber prices rebounded overnight, though did not recover all the losses made in the last few days’ trading. On Tokyo’s Tocom Exchange, prices for the six-month contract increased by about 5 yen, trading at around yen 315 ($4.12) per kg on Tuesday 27 Sept. Shorter-dated prices also recovered, trading at yen 310.

In Singapore, SGX said RSS3 trading was thin with little movement in prices. TSR20 for delivery in February 2012 was up $0.13 at $4.21.

In India, the NMCE said prices fell by two rupees, with October deliveries priced at Rs 210 ($4.27).

In China, the Shanghai Futures Exchange saw prices recover by yuan1.2, with October deliveries trading at Yuan 29.5 ($4.61) per kilo.







Rubber producers urged to cut exports if necessary
Written by HMH | September 27, 2011 | 0 |





SINGAPORE, Sept 27 — The International Rubber Consortium (IRCo) has urged Thailand, Indonesia and Malaysia to curb exports if rubber prices fall further in the wake of a global economic slowdown, a senior Thai official said today.

Thailand, Indonesia and Malaysia, which together account for about 70 per cent of global rubber output, agreed in December 2008 to slash exports and refrain from selling at below $1.35 (RM4.25) a kg following a drop of 60 per cent in prices — the toughest action by members of the group to date.

“We’ve advised the three countries to slow exports if the rubber price falls to a certain level that we can’t accept and hurt rubber small holders,” said Yium Tavarolit, IRCo’s chief secretary and economist.

“We are waiting for responses from the three countries. We can’t disclose the price level. We call it our defence price. If the price reaches the threshold, we have to react,” he told Reuters from Bangkok.

Tokyo rubber futures, which set the tone for physical prices, rebounded today after tumbling 12 per cent to a one-year low around 303 yen a kg yesterday, hit by a global sell-off in risk assets.

The key Tokyo Commodity Exchange rubber contract for March delivery, which debuted today, was at 321.0 yen per kg by 0221 GMT (0921 Malaysian time). The previous benchmark February contract jumped 19.6 yen to 322.6 yen.

In December 2008, Thailand, Indonesia and Malaysia agreed to cut exports by a total of 915,000 tonnes in 2009 to prop up prices because the economic meltdown, which sent the price of Thai RSS3 grade to a near seven-year low of US$1.10 a kg.

The IRCo brings together rubber industry officials, exporters and government officials from the three Southeast Asian countries. RSS3, often seen as benchmark physical prices in Asia, currently hovers at around US$4.50 a kg, down from a lifetime high at US$6.40 in February.

Yesterday, IRCo’s chief executive, Darmansyah Basyaruddin, said in Jakarta that natural rubber prices could still rise to more than US$5 a kg in the fourth quarter of this year as growth in emerging economies is expected to offset a slowdown in Europe and the United States. — Reuters






TOCOM To Narrow Circuit-Breaker Band For Rubber
Written by HMH | September 27, 2011 | 0 |





The Tokyo Commodity Exchange, Japan’s largest commodity bourse, will halve the price width of its circuit-breaker for rubber futures from October to help limit market volatility, an exchange official said on Tuesday (Sept 27).

“After observing market trends such as volatility, prices hit and other factors over the past few months, the exchange decided to change the price width of the circuit-breaker for rubber futures from Oct. 3,” the official said.

When a circuit breaker is triggered, TOCOM suspends trading for five minutes before the trading band is widened, helping to moderate any sharp accelerations in price moves.

The circuit-breaker will be hit after price rises or falls of 5 yen from the night session of Friday Sept. 30, which is counted as part of the next trading day’s session.

Currently, the circuit-breaker is hit when prices move up or down by 10 yen.

The circuit-breaker would kick in three times up to a maximum price move of 20 yen, at which point trading would effectively halt, the official said. This applies to all contracts except those from the front-end, which may see further expansion in the circuit breaker.

TOCOM, which lists gold, platinum, rubber and other industrial commodity futures, does not plan to make similar changes to other products, the official said.

Global financial markets tumbled late last week on deepening investor wariness over European policymakers’ ability to resolve the region’s sovereign debt crisis, and the risk that it could hurt the world economy.

Key TOCOM rubber futures tumbled nearly 12 percent on Monday (Sept 26), while Shanghai rubber futures fell by their daily limit.







Synthetic rubber consumption up 11% in June


NEW DELHI, SEPT. 26:
The country’s synthetic rubber consumption rose 11 per cent to 36,945 tonnes in June, while domestic production rose marginally to 9,279 tonnes in the same period, according to the Rubber Board.

Synthetic rubber consumption and output stood at 33,235 tonnes and 9,254 tonnes respectively in June last year, the Rubber Board data shows.

In the April-June quarter of the current fiscal synthetic rubber consumption rose nearly 11 per cent to 1,09,575 tonnes as compared with 99,160 tonnes in the same period of the previous fiscal.

Production of natural rubber rose by four per cent to 28,009 tonnes against 26,956 tonnes in the period under review.

However, production of synthetic rubber on a month-on-month basis declined by two per cent to 9,279 tonnes in June, compared with 9,468 tonnes in May.








Spot rubber declines on global cues


KOTTAYAM, SEPT. 26:
Physical rubber prices lost heavily on Monday. The market opened weak and surrendered further as Key Tokyo rubber futures crashed to an 1-month low following a sharp drop in global equities late last week on concerns over global economic growth and Europe's debt crisis. The trend was also catalysed by another weak closing on the National Multi Commodity Exchange (NMCE). “There has been no panic selling from dealers or growers but we expect more of them to join the sellers' queue once RSS 4 moves bellow the Rs 200 level '', analysts observed.

Sheet rubber declined to Rs 210 (214) a kg, according to traders. The grade dropped to Rs 211 (214) a kg both at Kottayam and Kochi, as quoted by the Rubber Board.

RSS 4 weakened at its October series to Rs 210.44 (212.07), November to Rs 208 (209.21), December to Rs 208.88 (210.63), January to Rs 209.40 (212.28) and February to Rs 210.20 (211.72) a kg on NMCE.

RSS 3 (spot) dropped to Rs 219.74 (224.17) a kg at Bangkok. The September futures for the grade nosedived to ¥315.4 (Rs 204.67) from ¥330 a kg during the day session and then to ¥302.7 (Rs 196.43) a kg in the night session on the Tokyo Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 210 (214); RSS-5: 207 (208); ungraded: 198 (199); ISNR 20: 207 (209) and latex 60 per cent: 133 (134).