Rubber

[winston]

Rubber Tops 500 Yen to Record as Recovery Boosts Demand Outlook
By Aya Takada and Supunnabul Suwannakij

Rubber surged to more than 500 yen a kilogram for the first time as signs the global economy is improving boosted speculation, demand will keep expanding for the commodity as weather disruptions constrain supplies. The cash price in Thailand also surged to a record.

The July-delivery contract climbed as much as 2.9 percent to a record 504 yen a kilogram ($6,178 a metric ton) on the Tokyo Commodity Exchange before settling at 502.9 yen. The most-active contract surged 7.2 percent this week, the largest advance in 13 weeks.

“Optimism about global economic growth spurred investors to buy industrial commodities,” Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co., said today by phone. “Rubber also advanced on speculation that Chinese buyers may step up purchases after the New Year holiday.”

Rubber futures have gained 21 percent this year, extending last year’s 50 percent rally. Supplies from Thailand, Indonesia and Malaysia, the top growers representing 70 percent of global supply, were curbed by rain while rising car sales led by China and India improved demand.

“Concerns over worsening supply shortage still boost the sentiment as demand remains robust, while supply may demand further as rubber trees are entering leave-shedding season, lowering output,” Sureerat Kunthongjun, an analyst at AGROW Enterprise Ltd., said by phone from Bangkok.

La Nina, which started in June and usually lasts for nine months or more, has led to higher-than-average rainfall in most parts of Southeast Asia. The weather event is having a “major impact” on rubber and palm oil production in Malaysia, as heavier rainfall may hamper harvesting and tapping, according to the Malaysian Meteorological Department.

The physical price of natural rubber in Thailand advanced to a record 184.05 baht ($5.96) a kilogram today as investors are concerned over the supply situation in Thailand and Malaysia ahead of the annual low-production period, the Rubber Research Institute of Thailand said. Robust car sales in the U.S. supported prices, it said.

Natural-rubber consumption in China may rise 9 percent to 3.6 million tons this year and India’s consumption may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries.

China’s natural-rubber inventories rose for the first week in four, adding 126 tons to 58,673 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said Feb. 1. That was a 61 percent drop from last year’s peak of 151,832 tons.

Car-sales growth in China will be around 10 to 15 percent this year, the China Association of Automobile Manufacturers said Jan. 10. Total auto sales, which include cars, trucks and buses, jumped 32 percent last year to 18.06 million, the association said.


http://www.bloomberg.com/news/2011-02-0 ... ecord.html

[winston]

vested in Sri Trang

Rubber Climbs to Near Record as China May Increase Purchases By Aya Takada

Rubber increased as a price decline yesterday spurred investors to buy amid speculation China, the world’s largest user, may step up purchases after the New Year holiday to replenish stockpiles.

The July-delivery contract gained as much as 2.1 percent to 501.3 yen a kilogram ($6,090 a metric ton) before trading at 499.3 yen on the Tokyo Commodity Exchange as of 11:57 a.m. The most-active contract had the biggest one-day drop since Jan. 26 yesterday, retreating from a record 504 yen reached Feb. 4.

China will resume trade tomorrow after the weeklong holiday. Natural-rubber inventories monitored by the Shanghai Futures Exchange stood at 58,673 tons, 61 percent below last year’s peak of 151,832 tons, the bourse said Feb. 1.

“Rubber is buoyed by expectations that Chinese buying may gather pace,” Kazunori Kokubo, general manager at Tokyo-based broker Yutaka Shoji Co., said today by phone. “The approach of wintering is another support to the market.”

Farmers reduce tapping during the so-called wintering period from February to May, when rubber trees shed leaves and latex production declines. Some plantation areas in northeast Thailand have already entered the low-output season, according to the Rubber Research Institute of Thailand.

Rubber users tend to increase stockpiles of raw material before the low-production period begins in major growing areas. Thai rubber production usually shrinks as much as 60 percent from peak levels, according to the Association of Natural Rubber Producing Countries.

La Nina

Rubber futures have gained 20 percent this year, extending last year’s 50 percent rally, as rising car sales led by China and India improved demand for tires.

Supplies from Thailand, Indonesia and Malaysia, the top growers representing 70 percent of global supply, were curbed as a La Nina has led to higher- than-average rains in parts of Southeast Asia. The weather event started in June and usually lasts for nine months or more.

The Thai physical price remained at a record 184.05 baht ($5.97) per kilogram yesterday, supported by car sales and supply concerns, the Rubber Research Institute of Thailand said.

The Shanghai market is closed for the Lunar New Year holiday. May-delivery rubber in Shanghai climbed to a record 41,850 yuan ($6,350) a ton on Jan. 31.

Natural-rubber consumption in China may rise 9 percent to 3.6 million tons this year, while rubber use in India may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries.

Natural-rubber output in India, the fourth-biggest producer, gained 2.8 percent in the 10 months through January as favorable weather and record prices boosted production, the state-run Rubber Board said yesterday.

Production totaled 749,950 metric tons in the April-January period, compared with 729,250 tons a year earlier, the board said in an e-mailed statement. Output was 98,800 tons last month, little changed from 97,500 tons a year earlier, it said.

http://www.bloomberg.com/news/2011-02-0 ... hases.html

[winston]

vested in Sri Trang

Q+A-What is driving record high rubber prices? By Apornrath Phoonphongphiphat

BANGKOK, Feb 15 (Reuters) - Rubber futures prices in Tokyo and Shanghai surged to a lifetime high this year and are likely to rise further on speculative buying and seasonal tight supply.

Benchmark rubber on the Tokyo Commodity Exchange <0#JRU:> for July delivery reached a new record high of 522.5 yen ($6.27) per kg on Tuesday. The most-active May rubber contract on Shanghai's exchange hit a record 43,500 yuan ($6,595) per tonne on Feb 9.

Strong futures are boosting physical prices, lifting the benchmark Thai RSS3 contract to a record $6.40 per kg on Monday.

Here are questions and answers on factors likely to influence rubber prices and the market.


WHAT IS HAPPENING WITH DEMAND AND SUPPLY?

Rubber prices began rising sharply in November when floods hit Thailand, the world's biggest rubber producer and exporter, disrupting tapping and destroying plantations.

After the floods receded, Thailand's southern region, which contributes 90 percent of the country's annual rubber production of around 3.2 million tonnes, was hit by unseasonal rains that disrupted tapping in December and January, cutting production.

Rains also affected plantations in Malaysia, the world's third-biggest producer, cutting supply, traders said.

This has coincided with a dry season in Indonesia, the world's second-biggest producer and exporter, further reducing supplies.

Output is likely to fall sharply from the end of February, when the dry season reduces latex output. Rubber trees have already started to shed leaves and are due to stop producing latex completely by March and April, when farmers will stop tapping and supply will probably drop as much as 80 percent.

Demand, however, is strong, especially from China, the world's biggest rubber consumer, due mostly to growth in its auto industries. China auto sales rose 33 percent in 2010, securing its position as the world's top market.

Despite record high offered prices, buying hasn't abated, encouraging producers to quote at even higher prices.

Benchmark Thai RSS3 was offered at the record high of $6.40 per kg. [ID:nSGE71D00O] IS SPECULATIVE BUYING PICKING UP? Heavy speculative futures buying is also driving up physical prices, say industry officials and analysts, noting the U.S.

Federal Reserve's $600 billion bond purchase programme has funneled cheap money into the rubber market, led by investors betting on further price rises who seek to take profits later.

"Funds have been pouring money into several commodities since late 2010, in particular rubber as they saw opportunities to capitalise on high prices at a time that supply is getting lower," said Yium Tavarolit, an economist at the International Rubber Consortium Ltd (IRCo).


IS THERE HOARDING?

As supplies dwindle ahead of the dry season, local traders and producers have become reluctant to sell. Many want to keep rubber sheet in stock and wait to sell when prices move higher.

"They know that prices will rise eventually in March and April when supplies are due to fall sharply as rubber trees will stop producing latex," said a trader in Hat Yai, a southern Thai city and major rubber centre near the Malaysian border.


Source: Reuters

[winston]

Singapore Rubber Plant a Warning for Price Hikes, Says Bear's Tyres
by Bear's Tyres

Close According to Bear's Tyres , the new butyl rubber facility being built in Singapore is in response to the rising demand for tyres in the region.

Lanxess, a leading synthetic rubber company in the world has brought forward its plans to build a new butyl rubber facility in Singapore.

The construction of this US$575m plant is being hastened to help serve the rising demand for tyres fuelled by rapid economic growth in countries such as China and India


http://www.ferret.com.au/c/Bears-Tyres/ ... es-n907134

[winston]

Not vested. From Phillips:-

(-) TSR20 and RSS3 rubber on the Singapore Commodity Exchange (SICOM) dropped 6.4% and 4.9% WoW respectively.

The continued falls in rubber prices reflected concerns over China’s sales of rubber
inventories, worries that rising inflation could hurt global economic recovery and China’s further monetary tightening measures.

In our view, a steady drop in rubber prices could put negative pressure on STA share prices in the near term.

[winston]

Thai govt says asked exporters to halt rubber shipments

BANGKOK, March 17 (Reuters) - The Thai government has asked rubber exporters to halt shipments and a state body overseeing the sector will meet next week to look at further ways to support prices, Deputy Prime Minister Suthep Thaugsuban said on Thursday.

"I will call an urgent meeting on Monday to discuss how to push rubber prices higher so they stay at those high levels," Suthep told parliament on Thursday.

The government had already asked exporters to halt exports and keep rubber in stock, he said, adding that they had around 300,000 tonnes of smoked rubber sheet (RSS3) in stock now.

Thailand is the world's biggest rubber exporter.


Source: Reuters

[Aspellian]

Rubber industry's equivalent of OPEC! artificially supporting and manipulating prices instead of letting market forces decide.

[winston]

DJ China Feb Natural Rubber Imports Down 14.4% At 107,218 Tons

SHANGHAI (Dow Jones)--China's natural rubber imports in February declined 14.4% compared with the same month last year, to 107,218 metric tons, the General Administration of Customs said Monday.

February's natural rubber imports were down 27% from January, when 147,382 tons were imported, the data showed.

During the January-February period, China shipped in 254,590 tons of natural rubber, a decline of 14.2% from the same period last year.

China is the world's biggest importer of natural rubber and sources most of its supplies from Thailand, Indonesia and Malaysia--the world's leading natural rubber producers.

Source: Dow Jones Newswires

[winston]

At least 50,000T Thai rubber shipments delayed by floods

BANGKOK, March 31 (Reuters) - At least 50,000 tonnes of rubber shipments from Thailand, the world's bigges rubber producer and exporter, were delayed by severe floods in the country's major rubber producing areas, disrupting transportation, senior industry officials said on Thursday.

"At least 50,000 tonnes of rubber had to be delayed and I expect more could be delayed if the flood persists longer than expected," Luckchai Kittipol, president of the Thai Rubber Association, told Reuters.


Source: Reuters

[winston]

Floods cut Thai 2011 rubber output forecast cut by 1%

BANGKOK, April 19 (Reuters) - Thailand, the world's biggest rubber producer and exporter, should produce 3.46 million tonnes of rubber this year, down one percent from a January forecast due to heavy floods, the chief of an industry body said on Tuesday.

"We still believe we can produce around 3.46 million tonnes this year, or around 1 percent drop from the previous forecast," Luckchai Kittipol, president of the Thai Rubber Association, told Reuters, referring to a previous forecast of 3.49 million tonnes made in January.

"With a prospect of strong demand not only from China and India, but also in Europe and Japan, this year the average price of benchmark Thai RSS3 should not be below $5.0 per kg," he said.


Source: Reuters