Rubber

[winston]

Are they trying to talk up rubber price ? Didnt another group say that their would be some over-suppy in 2H 2011 ?

Rubber Supply Tightness to Last Until 2018, Growers Group Says

July 20 (Bloomberg) -- Global supply of natural rubber will remain at least during the next seven years as output gains among key growers fail to match rising demand from tire and glove makers, according to a producers group.

Tightness in supply will continue until 2018 as production growth is marginal or moderate, Jom Jacob, a senior economist at the Kuala Lumpur-based Association of Natural Rubber Producing Countries, said in an interview in Bangkok yesterday. The member countries of the group, also called ANRPC, represent 92 percent of global supply.

Limited supplies may help boost a 47 percent rally in rubber futures in Tokyo in the past year, potentially increasing costs for companies such as Bridgestone Corp., Michelin & Cie. and Goodyear Tire & Rubber Co., the top three tire makers.

Prices may remain until next year as persistent rains limit gains in output, Pongsak Kerdvongbundit, president of Thai Rubber Association, said yesterday.

A large number of producing rubber trees, which were planted during 1980s, will have to be uprooted between 2012 and 2018, reducing total area of plantations worldwide, Jacob said. Farmers delayed cutting down trees to take advantages of high prices, he added.

Rubber advanced to a record 535.7 yen a kilogram ($6,768 a metric ton) on Feb. 18 as global demand led by China outstripped supply and after rain and flooding curbed output in Thailand and Indonesia, the two largest exporters.

December-delivery contract today gained as much as 3.2 percent to 390.9 yen a kilogram on the Tokyo Commodity Exchange.

Aged Trees

Output from ANRPC member countries may climb to as much as 10.3 million tons next year from 9.9 million tons this year, data from the group show. Production may expand further to 12.2 million tons in 2015 and 13.4 million tons in 2018, it said.

Thailand and Vietnam will have a greater expansion rate, while the growth in Indonesia and Malaysia will probably be stagnant, Jacob said. Some farmers may retain aged trees to gain from high prices, he said.

Rubber production growth in 2015 may increase between 5.8 percent and 6.6 percent, compared with 2 percent to 6 percent in normal years as trees planted in 2008 will be ready for tapping, Jacob said.

The natural rubber shortage may widen to 1 million tons by 2020 as demand from tire makers boosts consumption to about 15.4 million tons, Stephen Evans, secretary general of the International Rubber Study Group said on June 8. Demand this year may gain 4.7 percent to 11.2 million tons, he said.

Chinese Demand

China, the worlds largest consumer, may use 3.5 million tons of natural rubber this year, a 6.1 percent increase from a year earlier, according to ANRPC. Vehicle sales in the Asian nation, the worlds largest automobile market, may grow about 5 percent this year, Zhu Yiping, head of the China Association of Automobile Manufacturers statistics department, said on July 8.

Supply deficit in India, the second largest buyer, will widen as increasing car sales boost demand for tires, Vinod Simon, president of All India Rubber Industries Association, said in an interview yesterday. The shortfall may widen to 840,000 tons in 2020 from 175,000 tons this year, he added.

Bridgestone Corp. and its Indian rivals including Apollo Tyres Ltd. and MRF Ltd. are investing $3 billion in plants to meet rising demand for tires, according to the Automotive Tyre Manufacturers Association. Car sales in the worlds second-most populous nation may more than double to 3 million by 2015, according to the government.

Source: Bloomberg

[winston]

Thailand to slash rubber output as price sags

BANGKOK: Top rubber producer Thailand aims to cut output by 3.5 percent this year and will urge Indonesia and Malaysia to follow suit in a bid to prop up prices, which have fallen about a third since hitting record in February, industry officials said on Tuesday, Oct 4.

http://www.theedgemalaysia.com/business ... -sags.html

[winston]

Malaysian Rubber

Rubber production may advance 4 percent to 1.04 million tons next year as steady prices spur growers to expand planting, the ministry said.

Output will rise 6.5 percent to 1 million tons this year as small-holders are expected to increase tapping of trees to benefit from higher prices, it said.

The planted area probably increased 2.7 percent to 1.05 million hectares (2.59 million acres) in 2011, with new plantations in Sabah and Sarawak, the report said. Malaysia is the world’s third-largest rubber producer.

Rubber futures in Tokyo, down 24 percent this year, more than tripled in the previous two years as rising global vehicle sales boosted tire demand.

Global demand may expand at a faster pace, led by strong vehicle sales in China, which will help sustain rubber prices, the finance ministry report said.

( Winston: Are vehicle sales in China really that hot especially when they have removed the subsidies ? )

Source: Bloomberg

[winston]

TOL:-

How's the flood affecting the price of rubber ?

[winston]

Thailand Flood

Most rubber plantations are mainly located in the southern region near Haadyai/Songkhla.

The current flooding in Thailand affected mainly the northern region while the southern region is being spared for now.

According to glove players, there will be no impact from the disaster to the supply and price of latex.

If the situation worsens and spreads to the rubber planting region, supply constraints are likely to emerge and push the price of latex higher.

However, the potential price hike is deemed to be short term and will normalise once the situation improves (it takes one to two months to recover).

Source: MIDF Research

[winston]

Thailand, Indonesia Set $3 Minimum Selling Price to Halt Rubber’s Slump
By Supunnabul Suwannakij

Exporters in Thailand, Indonesia and Malaysia that represent 70 percent of global supply agreed to set a minimum price for natural rubber of $3 per kilogram, Thai Rubber Association President Pongsak Kerdvongbundit said.

“The three associations agreed not to sell rubber below the minimum price after a sharp fall” in futures, Pongsak said by phone today.

Rubber plunged 16 percent this month on the Tokyo Commodity Exchange as Europe’s sovereign-debt crisis threatened demand and the worst floods in almost 70 years in Thailand cut automobile output, reducing consumption of tires.

http://www.bloomberg.com/news/2011-11-1 ... slump.html

[winston]

DJ China October Natural Rubber Imports 215,949 Tons, Up 37% On Year

SHANGHAI (Dow Jones)--China's natural rubber imports in October rose 37% compared with the same month last year, at 215,949 metric tons, the General Administration of Customs said Monday.

October's natural rubber imports fell 8.3% from September, when 235,391 tons were imported, the data showed.

In the January-October period, natural rubber imports increased 11% compared with the same period last year, to 1.7 million tons.

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


Source: Dow Jones Newswires

[winston]

Biggest Rubber Glut Since 2004 Offers Respite to Bridgestone: Commodities

Rubber plantations from Indonesia to Ivory Coast will tap a global crop this year that will create the biggest glut since at least 2004, cutting costs for Bridgestone Corp., Michelin & Cie. and other tiremakers.

http://www.bloomberg.com/news/2012-01-1 ... ities.html

[winston]

This "real world" indicator shows China is slowing

Tire demand in China, the largest rubber consumer, is growing at a slower pace than last year as the nation'seconomic expansion is decelerating, said an executive at Bridgestone Corp.(5108), the biggest tiremaker.

"The Chinese market is in an adjustment phase," Vice President Makio Ohashi said in an interview yesterday. Growth in tire sales for trucks and buses, or half of the country's demand, may slow to near the rate of gross domestic product expansion at 7.5 to 8 percent annually from last year's 11 percent, said Ohashi. Passenger-car tire sales are also slowing from last year's 16 percent expansion, he said.

China's passenger-car sales fell 1.3 percent in the three months ended March 31, the first decline since the firstquarter of 2005, according to the China Association of Automobile Manufacturers. Rubber futures on the Tokyo Commodity Exchange have lost 9.1 percent since March amid concerns the sovereign-debt crisis in Europe mayderail the global recovery.

China's vehicle sales this year will probably miss their 8 percent growth forecast as the slowing economy and rising fuel costs curb buying, Gu Xianghua, deputy secretary general of state-backedCAAM, said on March 20.

Bridgestone forecast in February operating profit will jump 41 percent to a record 269 billion yen in the yearending Dec. 31, based on the assumption that futures in Singapore will trade between $3.98 and $4.06 a kilogram. Ribbed-smoked-sheet rubber on the Singapore Exchange settled at $3.81 a kilogram yesterday.

India, Southeast Asia

Bridgestone plans to consume a record 1.99 million tons of rubber, including natural and synthetic, for tireproduction globally this year, rising 5.3 percent from last year, said KoaruTomizawa, public relations manager.

A slowdown in Chinese sales may be offset by faster expansion in other emerging markets including India and Southeast Asian nations, helping Bridgestone achieve its tire sales target forthis year of 2.72 trillion yen, Ohashi said.

Bridgestone forecasts Indian demand for replacement tires for trucks and buses will grow 39 percent this year from last year, while demand for passenger-car tires will expand 15 percent. Tireuse in Thailand is expected to grow 24 percent for trucks and buses, and 13 percent for passenger-car tires.


Source: Bloomberg

[winston]

not vested

Rubber Plunges to Lowest in Four Months as Greek Impasse Reduces Demand

Rubber plunged to a four-month low as the political impasse in Greece raised speculation the nation may leave the euro, deepening an economic slump in the region and weakening demand for the commodity used in tires.

http://www.bloomberg.com/news/2012-05-1 ... emand.html