Tokyo futures edge up, Thai intervention eyed (Jan 24)

Tokyo futures edge up, Thai intervention eyed (Jan 24)
January 24, 2012






TOKYO, Jan 24 (Reuters) – Key Tokyo rubber futures rose 0.7 percent early on Tuesday as investors remained hopeful that a deal can be reached on Greek debt restructuring even after European finance ministers rejected an offer by Greece’s private creditors.

FUNDAMENTALS

* The key Tokyo Commodity Exchange rubber contract for June delivery was changing hands at 308.2 yen per kg as of 0039 GMT, up 2.2 yen.

The benchmark hit a three-month high of 315.8 yen per kg on Friday, helped by a Thai government plan to prop up the physical market.

* Thailand, the world’s biggest rubber producer, is drawing up plans to set aside 15 billion baht ($475 million) to buy rubber after USS3, the rubber sheet sold to factories by farmers, fell by half from last February.

The cabinet is due to make a decision on Tuesday.

* Commodities rallied broadly on Monday on the strong euro and signs a deal may be reached on Greek debt restructuring, with gold prices rising to six-week highs and oil and food prices posting gains.

MARKET NEWS

* Oil prices rose on Monday after the European Union agreed to ban imports of Iranian crude from July, Tehran threatened again to close the Strait of Hormuz shipping channel, and on additional support from the weak dollar.





Rubber May Drop ‘Sharply’ Through March, Goldman Sachs Says
January 23, 2012






Rubber may decline “sharply” through March as the end of the low-production season in Southeast Asia approaches and demand stays weak in China, the biggest consumer, said Goldman Sachs Group Inc. (GS)

Prices have been “artificially inflated” after Thailand, the top producer, announced a program to buy the material above market rates to support farmers and as users boosted stockpiles before the Lunar New Year, it said.

Futures retreated from the highest level in almost three months today, snapping a five-day rally. The most active contract advanced 13.3 percent last week, the biggest such gain since 2008. Goldman said this month it was maintaining its forecast for commodities to gain 15 percent this year with rallies in copper, oil and gold as economic growth in the U.S. and Asia offset the impact of a European recession.

“With current prices soaring in an environment where actual demand is not particularly strong, we think prices could drop sharply,” said analysts led by Yuichiro Isayama.

The market will switch to a 413,000-metric-ton surplus in 2012 from an 87,000-ton shortage last year, the bank said, keeping to its prediction last month. The glut may increase to 551,000 tons in 2013, it said. Futures will drop as low as 240 yen ($3.12) a kilogram (2.2 pounds) this year, the lowest since November 2009, according to the median estimate in a Bloomberg survey of 14 analysts and traders.

China Demand

The June-delivery contract fell 2.7 percent to settle at 306 yen on the Tokyo Commodity Exchange today. The most-active month climbed to 315.8 yen on Jan. 20, the highest since Oct. 28.

Demand in China fell last year to 3.59 million tons from 3.63 million tons in 2010, the bank said.

China’s gross domestic product increased 8.9 percent in the last three months of 2011 from a year earlier, the fourth straight quarterly slowdown and the weakest pace in 10 quarters. Growth may drop to below 8 percent this quarter, according to estimates from UBS AG, Nomura Holdings Inc. and Societe Generale SA, as export demand cools further and the government maintains its campaign to rein in housing costs.

The Thai government plans to spend 17 billion baht ($541 million) to buy rubber at above-market rates to boost prices, Deputy Prime Minister Kittiratt Na-Ranong said Jan. 17.






Market on Jan 23: Buyer resistance saps spot rubber
January 23, 2012




KOTTAYAM, JAN. 23:

Rubber markets declined on Monday. In the spot, prices fell following weakness in the domestic and international futures. According to sources, leading counters lost mainly on buyer resistance amidst scattered transactions. The trend was partially mixed.

Sheet rubber closed weak at Rs 190.50 (192) a kg, according to traders. The grade declined to Rs 191 (192.50) a kg both at Kottayam and Kochi, as quoted by the Rubber Board.

In futures, the February series dropped to Rs 192.75 (194.98), March to Rs 196.45 (198.98), April to Rs 202.21 (205.02), May to Rs 205.10 (207.76) and June to Rs 206.15 (207.50), while the July series improved to Rs 206.50 (204.60) a kg on the National Multi Commodity Exchange).

RSS 3 (spot) slipped to Rs 190.27 (190.30) a kg at Bangkok. The January futures for the grade declined to ¥289.5 (Rs 188.40) from ¥297.9 a kg during the day session but then remained inactive in the night session on the Tokyo Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 190.50 (192); RSS-5: 186 (187); ungraded: 181 (182); ISNR 20: 189 (190) and latex 60 per cent: 108.50 (108.50).






Thailand: Rubber Price Likely to Rise After Chinese New Year
January 24, 2012






The Kasikorn Research Center expects volatile rubber prices in 2012, pointing out that the price could rise to more than 110.29 baht per kilogram after the Chinese New Year due to an anticipated decline in China’s rubber stocks.

In its latest article about the rubber price situation in 2012, the Kasikorn Research Center said the rubber price is likely to fluctuate as various factors could affect rubber production and global demand.

These factors include concerns about the eurozone economic crisis, a slowing global economy, which would be detrimental to the automotive industry, and purchases by China, the world’s top rubber consumer.

Oil price movements, speculation of commodity funds on rubber futures market, and the government’s price intervention are other factors that could affect rubber prices.

However, the price of latex sheets issued by the Central Rubber Market is expected to increase.

It currently stands at 110.29 baht per kilogram after the Chinese New Year due to an anticipated decline in China’s rubber reserve, which will prompt the country to resume purchases.

Providing that China’s economy does not shrink from the previous quarter, it will continue to be a key positive factor for rubber prices.

Meanwhile, the fact that the government may soon apply measures to bolster rubber prices for growers is another contributing factor.