[29 Dec] Asia Rubber Futures Settle up on Thai Export Tax, Strong Dollar

Asian rubber settled higher Monday on the back of gains in equities and a stronger dollar amid holiday-thinned trade, trade participants said.

Thailand's announcement last week that it was planning to raise the export tax for rubber to anywhere between THB5.0 and THB7.0 a kilogram from around THB1.40/kg continued to support prices.

Physical prices of Thai USS3 raw material were higher, at close to THB86/kg, due to strong demand from rubber factories. Total sales have been above 150 tons on most days for past week due to increased arrivals amid less rain.

TSR20 grade rubber on the Singapore Commodity Exchange again sold at a premium to RSS3 grade. Sicom's TSR20 is benchmarked against Indonesian rubber, which is commanding high prices due to tight supplies.

The benchmark June RSS3 contract on the Tokyo Commodity Exchange settled 0.2% higher at Y276.8/kg after reaching an intraday high of Y278.6.

"Liquidity is low because many investors are away for holidays," said a Japan-based broker with Okachi Corp.

Traders said rubber's correlation with gold prices, seen during early part of this month, wasn't evident anymore.

Prices failed to break above a 15-month high of Y278.9/kg set Friday. Most traders put immediate resistance at Y278.9/kg, then Y280 and support at Y277, then Y275.

In the absence of fundamental cues, rubber futures mainly tracked currency and equity markets, said a Singapore-based executive at a commodities brokerage. The Nikkei 225 Stock Average closed at its highest level in four months Monday.

The benchmark March contract on the Shanghai Futures Exchange settled 0.4% higher at CNY23,545/ton even though inventories in warehouses recognised Futures Eby the Shanghai Exchange rose 8% during the week to Thursday, to 141,693 tons.

The benchmark July contract on the Agricultural Futures Exchange of Thailand settled 0.4% lower at an intraday low of THB96.10/kg.

Asian physical rubber prices were higher, tracking gains in futures markets, but many buyers kept to the sidelines.

"Sellers are keeping offers high as part of window dressing, hoping to convince buyers that current price levels are here to stay, once they return from holidays," said an exporter in Singapore.

He said cheaper rubber at bonded warehouses in Qingdao was also acting as a deterrent for buyers in China. Special-grade STR20 traded at $2,930/ton, free-on-board, for February shipment.

(Source: irco.biz)

[29 Dec] Rubber Shortage Hits Tyre Makers

Despite heavy imports of natural rubber (NR) this year, industrial users are still facing a supply crunch and are unable to have a good inventory due to low availability of the commodity even at high prices.

NR imports increased to 132,445 tonnes in April-November, the highest in recent years, compared with 60,026 tonnes in the same period last year. The Rubber Board estimated the total stock in the country at 247,000 tonnes in November against 175,000 tonnes last November. But, sources said the board’s data was inflated and it is misleading the stakeholders and the government on availability of rubber.

The actual stock would be not more than 150,000 tonnes, including latex and all grades of rubber, sources said. A leading Kochi-based trader said even at high prices (Rs 138 a kg), they were not getting the required quantity and are not in a position to ensure supply to manufactuers. He alleged this is mainly due to stocking by growers and a section of high-end traders to deal heavily in the futures market.

In the daily market, growers are reluctant to sell the stock immediately, awaiting better prices. This week, prices touched Rs 142 a kg. Growers believe the price would cross Rs 150 a kg in the near future. According to traders, the data about the stock is not in tune with the real status, but the Rubber Board is trying hard to project that there is no shortage.

Automotive Tyre Manufacturers Association has sought immediate permission for duty-free import of 100,000 tonnes of NR through the State Trading Corporation or any other designated agency to tide over the current shortfall in production and steep rise in prices.

(Source: irco.biz)

[26 Dec] Japan's Auto Production Rises 0.5% on Year in November

Production of cars, trucks and buses in Japan increased 0.5% on year in November, marking the first on-year gain in 14 months, the Japan Automobile Manufacturers Association said Friday.

Vehicle output rose to 859,677 vehicles in November from 855,333 vehicles in the same month a year earlier, the association said.

Domestic vehicle demand totaled 436,535 vehicles, up 18.3%.

The table of data shown as below:-

	Vehicles	Change on Year
Overall	859,677	+0.5%
Passenger cars	751,712	-1.7%
standard size	400,700	+5.3%
small	237,856	+3.9%
mini	113,156	-12.6%
Trucks	98,646	-7.1%
standard size	42,739	-14.5%
small	18,909	-14.9%
mini	36,998	+9.0%
Buses	9,319	-8.7%

(Standard-sized cars and trucks have an engine capacity of 2000 cubic centimeters or more; mini cars and trucks have an engine capacity of 660cc or less.)

(Source: irco.biz)

[26 Dec] Asia Rubber Ends Up On Thai Plan to Raise Export Cess

Asian rubber settled higher Friday, rising to a new 15 month high on Thailand's plans to more than treble its export cess and on spillover support from stronger dollar and crude oil, said trade participants.

The benchmark June RSS3 contract on the Tokyo Commodity Exchange settled Y1.4 higher at Y276.3/kg after reaching an intraday high of Y278.9, a level not seen since September 2008.

Amid the ongoing rise in rubber prices, Thailand's government plans to increase the rubber export cess to THB5-THB7 per kilogram from THB1.50 currently, Thailand's deputy prime minister, Suthep Thaugsuban said, after a visit to Indonesia.

The fee will be collected as a fund to support rubber farming.

The cess is to be used for planting new areas with rubber and replanting existing ones, said Pongsak Kerdvongbundit, managing director of Von Bundit Ltd, one of Thailand's biggest producers of natural rubber.

He said natural rubber production needs to be expanded to curb global warming and keep prices stable in the long-term.

However, if implemented, the increase in cess is likely to push up Thai rubber prices in the near-term to absorb the additional levy.

The benchmark March contract on the Shanghai Futures Exchange settled CNY110 higher at CNY23,450/ton after reaching a 14-month high of CNY23,605/ton even though inventories in warehouses recognised by the Shanghai Futures Exchange rose 8% during the week to Thursday to 141,693 tons.

The benchmark July contract on the Agricultural Futures Exchange of Thailand settled THB0.30 higher at THB96.45/kg after reaching an intraday high of THB97/kg.

"Institutional funds aren't very active today, but speculators continue to push up the rubber prices," said a Tokyo-based broker with Okachi Corp.

He said prices are likely to be rangebound around current levels in the near-term.

Most traders put immediate resistance on Tocom at Y280/kg, then Y286.50/kg, which is another high that was last reached in September 2008.

Traders in many rubber growing regions are not doing business today as Indonesia, Malaysia,Singapore and India are closed for a public holiday.

The rubber market has mainly been driven higher by crude oil, said a Bangkok-based trading executive.

Light, sweet crude for February delivery settled $1.38, or 1.8%, higher Thursday at a fresh three week high of $78.05 a barrel on the New York Mercantile Exchange.

A weaker yen, around Y91.48 against the dollar, was also providing support for rubber prices as it makes Japan's natural rubber imports costlier and pushes up yen-denominated Tocom futures.

Thailand is also targeting to build its internal rubber stock of 300,000 tons, Suthep said, adding that the government will contribute 100,000 tons while the private sector will provide the rest.

Indonesia and Thailand have agreed to keep their rubber export price above $2,600 per metric ton in a move to stabilize global rubber prices, Suthep added.

However, traders said prices are well above $2,800/ton.

Asian physical rubber prices were higher on strong Chinese demand, Thailand's plans to raise export tax on rubber.

"Current export tax works out to be around $42/ton and if increased to THB7/kg, it will be equivalent to around $210/ton, making it difficult for Thai factories to compete with their counterparts in Malaysia and Indonesia," said a Thailand-based trading executive. Thai STR20, RSS3 rubber were sold to buyers in China for January shipment at $2,900/ton, CIF.

(Source: irco.biz)

[26 Dec] Indonesia, Thailand to Keep Rubber Export Price above $2,600/Ton

Indonesia and Thailand have agreed to keep their rubber export price above $2,600 per metric ton in a move to stabilize global rubber prices, Thailand's deputy prime minister, Suthep Thaugsuban, said Friday.

Both countries plan to invite Vietnam to join them and Malaysia to strengthen their roles as the world's major rubber exporters, Suthep told reporters after a visit to Indonesia.

Thailand has targeted to build its internal rubber stock to 300,000 tons, he said, adding that the government will contribute 100,000 tons while the private sector will provide the rest.

Thailand has never had an official rubber stock piling as it usually lets the price flow with the global market, said a trader from local futures brokerage firm.

Following the rise in rubber prices, the government plans to increase the rubber export fee charge to THB5 to THB7 per kilogram from THB1.50 currently, Suthep said.

The fee will be collected as a fund to support rubber farming.

(Source: irco.biz)

[26 Dec] Thai STR20, RSS3 Rubber Sold To China at $2,900/Ton, CIF

Thailand's STR20 and RSS3 grades of natural rubber have been Friday sold to buyers in China at $2,900 a metric ton, basis cost, insurance and freight, for shipment in January, a trading executive said.

He said in one of the deals around 1,000 tons of STR20 was traded and around 500 tons of RSS3 was sold in another transaction.

Both STR20 and RSS3 grades are selling at around the same price, said the executive.

He said STR20 is no longer selling at a discount to RSS3 because of tight supplies.

(Source: irco.biz)

[26 Dec] Japan's Top Tiremakers Seek To Link Prices to Materials Costs

Bridgestone Corp. and Sumitomo Rubber Industries Ltd. are among the leading Japanese tire manufacturers in negotiations with auto makers to tie pricing for original equipment tires to prices for raw materials, the Nikkei reported Friday.

Such a mechanism would relieve both tiremakers and auto manufacturers of the need for price negotiations. The tire producers are now discussing their plans with such major auto makers as Toyota Motor Corp.

The tire companies envision a new index based on the prices of five materials, including synthetic and natural rubber as well as synthetic fiber. Tire prices would be set every six or 12 months under the proposed mechanism. Each tire manufacturer is expected to come up with its own framework.

At global leader Bridgestone, original equipment tires -- which automakers install on their new vehicles -- account for some 20% of total domestic tire sales. The figure is almost 50% forSumitomo Rubber, Japan's second-ranked tire manufacturer.

In contrast to the pricing of aftermarket tires, the tire companies have been unable to fully pass on higher costs for oil products and other materials to automakers, and this has weighed on their earnings. The tire producers hope to introduce the new price-setting mechanism next fiscal year.

If the auto makers agree to the proposals, it would mark the first use of such a setup for passenger cars. A similar framework has been used on a limited basis for truck and bus tires.

(Source: irco.biz)

Rubber price hits 15-month high

It gains on high crude price, supply shortage concern

PETALING JAYA: Natural rubber prices in Kuala Lumpur hit new 15-month highs yesterday, tracking gains in overseas markets amid rising crude oil prices and lingering worries over supply shortage as output from top producing countries declined.

Malaysia’s tyre grade SMR 20 rubber stood at RM9.53 per kg, up 113% since the start of the year. The price of in-bulk latex rose RM6 per kg to add up to its 68% gain year-to-date.

Yesterday, a newspaper report quoted Rural and Regional Development Deputy Minister Datuk Hasan Malek as saying that local rubber production had fallen 23.9% in the first eight months of this year compared with the previous corresponding period.

He also said Thailand’s production dropped 6.1%, Indonesia’s declined 6.3% and India saw a 10.9% fall over the same period.

Production in Thailand, Indonesia and Malaysia made up about 70% of the global rubber output.

A recent report from Thailand, the world’s largest producer and exporter of the commodity, indicated that flood and heavy rain in the main rubber-producing areas in the south had disrupted tapping and distribution activities.

Meanwhile, natural rubber futures on the Tokyo Commodity Exchange were also at their highest since September last year. The benchmark rubber contract closed at 274.9 yen per kg yesterday.

Reports from Tokyo cited rising crude oil price – up 98% so far in 2009 – as a factor that had driven up interest in rubber.

Crude oil in New York rose to a three-week high during Asian trading hours yesterday at US$77.22 per barrel. Crude oil is the raw material for synthetic products that can be used as a substitute for natural rubber.

“Rubber chased a rally in oil,” a Tokyo-based commodity analyst was quoted by Bloomberg yesterday.

Earlier this week, the International Rubber Study Group forecast global rubber consumption, including natural and synthetic, to reach 23.9 million tonnes this year.

Natural rubber production was projected at 10.4 million tonnes.

In the long term, annual global rubber consumption was projected to reach 30.4 million tonnes by 2019, with natural rubber production at 14 million tonnes.

(biz.thestar.com.my)

[25 Dec 2009] Rubber price in Shanghai, Tocom, Malaisia, Thailand

Rubber price in Shanghai, Tocom, Malaisia, Thailand: updated: 15h (GMT+7) 15/12/2009

Rubber Price in ShangHai Futures Exchange - SFE 

(CNY/ton)

Contract	Open	Low	High	Last	Change
01.2010	23160	23070	23260	23150	+155
03.2010	23450	23380	23605	23460	+120
04.2010	23655	23575	23865	23595	+55
05.2010	23860	23720	23950	23830	+150
06.2010				23620	-35
07.2010	23875	23740	23920	23810	+155
08.2010	23705	23705	23705	23705	-95
09.2010	23845	23675	23850	23795	+235
10.2010				23535	+200
11.2010	23250	23180	23290	23290	+280

Rubber Price in Tokyo Commodity Exchange - Tocom 

(0.1 JPY/Kg)

Month	Last Settlement Price	Open	High	Low	Close	Change	Volume
01.2010	264.2	267.0	268.4	265.2	266.4	+2.2	19
02.2010	265.0	268.7	270.0	267.3	267.3	+2.3	15
03.2010	266.8	270.4	271.4	268.8	268.8	+2.0	85
04.2010	268.7	268.5	273.1	268.0	270.8	+2.1	193
05.2010	272.2	271.9	276.0	271.2	273.8	+1.6	4,243
06.2010	274.9	274.8	278.9	273.8	276.8	+1.9	7,572
Total							12,127

Rubber Price in Malaysian Rubber Exchange - MRE 

December	Sen/Kg		US Cents/Kg
	Buyers	Sellers	Buyers	Sellers
SMR CV	990.50	1000.50	291.65	294.60
SMR L	973.50	983.00	286.65	289.45
SMR 5	-	966.00	-	284.45
SMR GP	-	963.00	-	283.55
SMR 10	946.50	956.00	278.70	281.50
SMR 20	944.50	954.00	278.10	280.90

RSS3 Rubber Price in Agricultural Futures Exchange of Thailand - AFE 

 (Baht/kg)

Contract Month	Prev.	Open	High	Low	Last	Change
01.2010	93.60
02.2010	95.40
03.2010	95.00
04.2010	95.30
05.2010	95.50	96.00	96.00	96.00	96.00	+0.50
06.2010	95.60	96.70	96.70	96.30	96.30	+0.70
07.2010	96.15	96.80	97.00	96.45	96.70	+0.55