Rubber Plunges to One-Year Low as Debt Crisis May Cut Demand

Rubber Plunges to One-Year Low as Debt Crisis May Cut Demand
September 26, 2011





Rubber slumped to a one-year low as the European debt crisis and a slowing global economy raised concern that demand for the commodity, used in tires and gloves, may weaken.

The February-delivery contract tumbled as much as 11.7 percent to 302.5 yen a kilogram ($3,966 a metric ton), before settling at 303 yen on the Tokyo Commodity Exchange, the lowest settlement level since Sept. 17, 2010. Rubber futures lost 6.2 percent last week, for a third weekly decline. The market was closed on Friday for a public holiday.

Asian stocks fell, driving the MSCI Asia Pacific Index toward the lowest since July 2009, while crude oil dropped for a fourth day on speculation that Europe’s failure to tame its sovereign-debt crisis may threaten global growth.

“Uncertainty about the macro economy is still haunting commodities markets,” Ker Chung Yang, an analyst at Phillip Futures Pte., said by phone from Singapore.

European policy makers are facing mounting pressure to step up efforts to prevent their sovereign debt crisis from further roiling the world’s financial markets and economy. Pacific Investment Management Co., which runs the world’s biggest bond fund, forecast advanced economies will stall over the next year with Europe sliding into recession.

U.S. Treasury Secretary Timothy F. Geithner warned at the annual meeting of the International Monetary Fund in Washington that a failure to combat the Greek-led turmoil threatened “cascading default, bank runs and catastrophic risk.” Billionaire investor George Soros said “something needs to be done” to safeguard Europe’s banks because Greece may be unable to avoid default.

“Worries over global economic slump sparked selloffs across commodities markets as investors prefer to hold cash, reducing risk,” Sureerat Kunthongjun, an analyst at Agrow Enterprise Ltd., said by phone from Bangkok.

Rising Inventories

Thailand, Indonesia and Malaysia, the biggest rubber producers representing about 70 percent of global supplies, may slow exports to counter a slump in prices, the International Rubber Consortium Ltd. said.

“The group is closely monitoring the situation and has prepared measures to respond to panic selloffs in the futures market,” Yium Tavarolit, chief secretary of the group said by phone from Bangkok today. “We may urge growers and exporters to hold back supplies and sell only necessary amount.”

Natural-rubber inventories rose 305 tons to 33,766 tons, the highest since March, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said Sept. 23 in a weekly report. That was 51 percent below this year’s high of 68,850 tons.

Vietnam may export 80,000 tons of rubber in September, according to a forecast from the Ministry of Agriculture and Rural Development. Exports for the first nine months of the year are seen at 530,000 tons, an increase of 3.3 percent compared with the same period a year earlier, the ministry said in a monthly report posted on its website.

In Shanghai, January-delivery rubber tumbled by a daily limit to close at 27,465 yuan ($4,297) a ton, the lowest level since Oct. 8.

The cash price of Thai rubber fell 3.2 percent 136.10 baht ($4.37) a kilogram today, the Rubber Research Institute of Thailand said on its website. Rains spreading across southern provinces will potentially disrupt production, it said.





Rubber prices fall over 10% on 26 September
Written by HMH | September 26, 2011 | 0 |





London — Rubber prices in arounhd the world fell further over the weekend, with the Shanghai prices down by over 10 percent since Thursday. On Tokyo’s Tocom Exchange, prices for the six-month fell around 10 percent, trading at around yen 310 ($4.05) per kg on Monday 26 Sept. Shorter-dated prices also fell sharply, trading at yen 303.

In Singapore, SGX said RSS3 prices also fell sharply, with March 2012 deliveries priced around $4.24, but October 2011 contracts closed down $0.10 at $4.33. TSR20 for delivery in February 2012 was down $0.23 at $4.08.

In India, the NMCE said prices fell by three rupees, with October deliveries priced at Rs 212 ($4.27).

In China, the Shanghai Futures Exchange saw prices drop by yuan1.5, with October deliveries trading at Yuan 28.3 ($4.42) per kilo.






India produced more rubber in June
Written by HMH | September 26, 2011 | 0 |





Kottayam, India — India’s production of rubber — both synthetic and natural in the three months to June 2011 was higher than in the same period of 2010.

Production of Natural Rubber (NR) in the country during June 2011 was 59,200 tonnes compared to the production of 56,850 tonnes during June 2010.

The cumulative production during the first quarter of the current fiscal year was 175,700 tonnes compared to 166,750 tonnes during the corresponding period of the previous year recording a growth of 5.4 percent.

The aggregate production of synthetic rubber (SR) during the first three months of 2011-12 increased to 28,009 tonnes compared to 26,956 tonnes during the same period of the previous year.

Consumption of SR during the first quarter of the current f i n a n c i a l y e a r i n c r e a s e d t o 109,575 tonnes compared to 99,160 tonnes during the corresponding period of the previous year, recording a growth of 10.5 percent.

The rate of growth in consumption in the auto tyre manufacturing sector during the first quarter of the current financial year was 10.2 percent as against 7.7 percent attained during the same period of the previous year, whereas, the non-tyre sector registered a negative growth of 5.3 percent compared to a positive growth of 4.1 percent in the same period of the previous year. The consumption provisionally estimated for July’11 is 82,000 tonnes.

The data was published in India’s Rubber Statistical news dated August 2011.





Tokyo futures plunge 12 pct on flight from risk (Sept 26)
Written by HMH | September 26, 2011 | 0 |





TOKYO, Sept 26 (Reuters) – Key Tokyo rubber futures plunged 11.6 percent to a year low and Shanghai futures fell by their daily limit on Monday as they took a hit from global sell-offs in risk assets.

The key Tokyo Commodity Exchange rubber contract for February delivery <0#2JRU:> dived 39.5 yen to settle at 303 yen per kg, the lowest level since September 2010. Some saw the next support line at 300 yen.

The most active Shanghai rubber contract for January delivery fell by its daily limit and closed at 27,465 yuan per tonne, down 4.5 percent from Friday’s close. Volume stood at 1,009,508 lots.

“We see the next support line at 300 yen. The market will turn ugly if the benchmark breaks through that mark,” said Naoki Asami, chief broker at trading company Kanetsu.

“We won’t see a swift recovery of the market unless global financial markets stabilise.”

Brent crude fell below $102 to a near 7-week low on Monday, as fears of an impending global recession led investors to dump riskier commodities in favour of safe-haven assets.

Reports that European leaders were seeking new ways to solve the region’s debt woes lifted commodities in early trade, but the market reversed sharply on concerns that policy-makers were doing too little to stem a crisis that helped wipe as much as 9 percent off oil prices last week.

The euro fell to a fresh 10-year low versus the yen while the Australian dollar slipped to a 10-month low against the U.S. dollar, as doubts over a rescue plan to support the euro zone pushed investors away from riskier currencies.

Japan’s Nikkei share average slid to its lowest close since April 2009 as it caught up with Wall Street losses after a three-day weekend.






Tokyo futures plunge on global econ, debt worries (Sept 26)
Written by HMH | September 26, 2011 | 0 |





TOKYO, Sept 26 (Reuters) – Key Tokyo rubber futures plunged 5 percent to their lowest in nearly 11 months on Monday as a sharp drop in global stocks late last week on concerns over the world economy and Europe’s debt problems hurt investor sentiment.

FUNDAMENTALS

* The rubber contract on the Tokyo Commodity Exchange <0#JRU:> for February delivery opened at 324.0 yen per kg, down 5.4 percent from Thursday’s close of 342.5 yen and marking the lowest for any benchmark since Nov. 1, 2010.

* Japanese financial markets were closed on Friday for a national holiday.

* The front-month September contract will expire late on Monday and the new benchmark March contract will become the new benchmark when it starts trading on Tuesday.

* TOCOM briefly suspended trade as a circuit-breaker was triggered immediately after trading began.

* Effective this session, TOCOM will expand the circuit-breaker, with rubber futures allowed to rise or fall by 50 yen.

* The most active rubber contract on the Shanghai commodity exchange for January delivery fell 1,665 yuan to finish on Friday at 28,735 yuan ($4,497.644) per tonne.

* The euro got off to a wobbly and volatile start on Monday in early Asia as investors reacted cautiously to mixed news out of Europe to tackle its escalating debt crisis.

* U.S. crude futures climbed in early Asian trade on Monday as European policymakers began working on new ways to stem the euro zone debt crisis and International Monetary Fund inspectors are likely return to Greece this week.

* For top stories on the rubber market and other news click , or

MARKET NEWS

* Asian shares rose and the euro steadied on Monday on reports that European leaders, under pressure from tumbling markets, were working on new ways to stop the fallout from the euro zone sovereign debt crisis wreaking more damage on the world economy.

* Japan’s Nikkei share average slipped to a six-month intraday low on Monday as it caught up with Wall Street losses after a three-day weekend, but the decline was limited by bargain-hunting ahead of a deadline to receive dividends.

* The Dow Jones industrial average on Friday suffered its worst week since the depths of the financial crisis in 2008, stung by severe anxiety over Europe’s spiraling debt crisis and a warning from the Federal Reserved about the U.S. economy.