Tokyo futures end 1 pct lower, euro debt worries linger

Tokyo futures end 1 pct lower, euro debt worries linger
December 13, 2011





SINGAPORE, Dec 13 (Reuters) – Tokyo rubber futures extended losses on Tuesday as equities and other commodities fell after a European Union summit aimed at solving the region’s deteriorating debt crisis failed to restore financial market confidence. Stocks in Asia plunged and the euro languished near a two-month low as investors took fright at the prospect of mass euro zone sovereign ratings downgrades after the outcome of a “last chance” EU summit was unable to convince markets. The most active Tokyo Commodity Exchange rubber contract for May delivery ended 2.8 yen a kg lower at 274.6 yen after hitting an intraday low at 272.2 yen. The contract plunged to a near 2-year low of around 248 yen in November.

“For this week, I think the concern is more on the European debt crisis. Rubber is more likely to track macroeconomics changes,” said Ker Chung Yang, analyst at Phillip Futures in Singapore. “Coming to the year-end, I would expect the physical market to go quieter,” said Ker, who pegged support levels at 248 and 250 yen.

In the physical market, Indonesia’s SIR20 tyre grade changed hands at 154.50 U.S. cents a pound ($3.41 a kg) for February shipment. Offers were limited in Southeast Asia after a combination of dry and wet weather curbed supply in Thailand, Indonesia and Malaysia. The Indonesia Commodity & Derivative Exchange (ICDX) is planning to launch a physical rubber contract following talks with the International Tripartite Rubber Council, but timescale and details had yet to be decided. In other commodities, gold fell to its lowest in seven weeks, London copper extended losses, while Brent crude was little changed after falling in the previous session on worries that last week’s pact by European leaders may not be enough to limit the region’s debt crisis.





Major rubber growers may back physical market in benchmark drive
December 12, 2011





AKARTA: Thailand, Indonesia and Malaysia, which account for about 70% of natural-rubber output, plan to set up a regional physical market to create a new benchmark for the commodity, according to a trade group.

The market would help producers trade with more transparent and reliable prices, Tjahjono Budiarto Tjandra, chairman of the Committee on Strategic Market Operations at the International Rubber Consortium, said in an interview in Bali on Monday.

The countries agreed to take “specific measures” to support prices, Bayu Krisnamurthi, Indonesia’s deputy trade minister, told reporters in Bali after a meeting of representatives from the three governments. Rubber has slumped in Tokyo this year as Europe’s debt crisis raised concern that demand may drop.

The Tokyo Commodity Exchange, which trades that benchmark, is tracking the contract plan. The initiative may involve the Indonesia Commodity & Derivatives Exchange, the Agricultural Futures Exchange of Thailand and the Malaysia Derivatives Exchange, Tjandra said.

“We’re ready to start the rubber contract next year,” Megain Widjaja, chief executive officer of the Indonesia Commodity & Derivatives Exchange, or ICDX, said in an interview. The three Southeast Asian exchanges and the consortium met in Phuket, Thailand last month to discuss the plan, Widjaja said.

“Although the current rubber price has declined from early 2011, it is still quite high,” Bayu said. “We must be ready for any situation that may further pressure the price.” Rubber futures in Tokyo are set for their worst annual performance since 2008, when the global economic recession reduced demand.

The contract for delivery in May closed at 277.4 yen per kg on Tocom on Monday. “We will closely watch the development of the issue,” said Fuminori Kondo, a spokesman for Tocom.

“We’ve heard similar ideas before. As the three producing countries represent 70% of global rubber output, the idea is interesting to us as our bourse trades rubber futures.”The Agricultural Futures Exchange of Thailand welcomed the rubber plan, which merits further study, according to Chairman Prasat Kesawapitak.

“The initiative also needs support from the government to help stabilize the price.” The International Tripartite Rubber Council - which represents growers and exporters from Thailand, Indonesia and Malaysia – last month encouraged members to blacklist buyers who default on purchases. Members may curb exports if necessary to limit supply and boost prices, the group said on November 19.

“There’s a desire from the governments of the three countries to set up a market as soon as possible that would be based on the real supply-and-demand fundamentals,” said Tjandra from the consortium, which represents growers and exporters from Thailand, Indonesia and Malaysia. The contract would most likely trade in dollars, he said.




Market on Dec 12: Spot rubber rules steady
December 12, 2011





KOTTAYAM, DEC. 12:

Spot rubber continued to rule unchanged on Monday. Sentiments were almost neutral following a weak closing in domestic futures on the National Multi Commodity Exchange (NMCE).

According to sources, the market remained under pressure on comparatively higher imports and slightly increased supplies above the Rs 200-mark. Imports showed a rise of almost five per cent in November, while exports went up to 580 tonnes compared with 60 tonnes during the same period last year, they added.

Sheet rubber finished steady at Rs 202 a kg, according to traders. It was flat at Rs 201.50 a kg both at Kottayam and Kochi, as reported by the Rubber Board.

In futures, the December series slipped to Rs 201.20 (202.98), January to Rs 202.50 (205.01), February to Rs 204.50 (207.19), March to Rs 207.65 (209.75), April to Rs 211.51 (214.63) and May to Rs 213.51 (216.50) a kg for RSS 4 on the NMCE.

The December futures increased to ¥263.4 (Rs 178.28) from ¥260.3 a kg during the day session but then dropped to ¥260 (Rs 176.01) in the night session on the Tokyo Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 202 (202); RSS-5: 199 (199); ungraded: 193 (193); ISNR 20: 189 (189) and latex 60 per cent: 111 (110).