Asian Rubber Futures Settle Up As No Supply Boost by ITRC

Asian rubber settled mostly higher Tuesday on strong buying support after a meeting of the International Tripartite Rubber Council ended with member countries endorsing the current high level of prices and not being able to boost supply.

The ITRC decided to tighten its grip on global supply of natural rubber by agreeing to include Vietnam as a member during a ministerial meeting in Kuala Lumpur that concluded Tuesday.

Physical prices of Thai USS3 raw material were higher above THB95 a kilogram in the three central markets on tight supply.

The benchmark June RSS3 contract on the Tokyo Commodity Exchange settled Y4.2 higher at Y299/kg after hitting an intraday high of Y303.1.

Prices were steady during the night session, and the June contract hit a high of Y302.5/kg. Night session prices aren't included in intraday trading.

"When overall fundamentals are strong and availability is reduced, there isn't much that the ITRC can do in the near term," said an analyst in Singapore.

Vietnam will become the fourth member of the ITRC, following which the group will account for 84% of the world's natural rubber output, up from 76% with three members, said Malaysia's Minister for Plantation Industries and Commodities, Bernard G. Dompok.

"It will be foolhardy to expect the ITRC to cool down prices as is being stated in rumors spread by some vested interests. As producing countries, our objective is to prevent any slump," said a government official of one of the member countries.

The benchmark May contract on the Shanghai Futures Exchange settled CNY270 higher at CNY25,045/ton.

The benchmark August contract on the Agricultural Futures Exchange of Thailand settled THB0.15 lower at THB106.70/kg.

Asian physical rubber prices were higher on strong demand as buyers snapped up cargoes, particularly of Indonesian grades.

Indonesian rubber is among the cheapest available in high quality grades, said an exporter in Singapore.

He said a major tire manufacturing company bought SIR20 rubber at $3,125/ton, FOB, for March shipment.

High prices are here to stay, so buyers are stepping up purchases before they increase further, said a Kuala Lumpur-based trading executive.

(Source: irco.biz)