Rubber Climbs on Supply, Limited by China Manufacturing Report

By Aya Takada

June 1 (Bloomberg) -- Rubber advanced after cash prices in Thailand, the biggest exporter, climbed on low supplies. The gains were limited as China’s manufacturing expansion slowed, raising concern demand from the largest consumer may weaken.

Futures in Tokyo increased 5.2 percent in the past four days, paring a monthly drop. The price declined 2.7 percent in May amid concern Europe’s sovereign debt crisis may stall economic recovery.

Chinese manufacturing expanded at a slower pace in May, adding to signs that growth may moderate in the world’s third- biggest economy. Rubber supplies from Thailand failed to pick up after a low-production season ended, as a dry weather curbed latex output, said Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo.

“The market is capped by concern about Europe’s debt problems and possible slowdown in China’s economy,” Shigemoto said today by phone. “There were no aggressive sellers as a stronger physical market boosted the price of the nearby contract in Tokyo.”

Rubber for November delivery, the most-active contract, advanced 0.2 percent to 285.7 yen per kilogram ($3,136 a metric ton) on the Tokyo Commodity Exchange at noon. Earlier the price fell as much as 0.5 percent.

June-delivery rubber on the Tokyo exchange jumped as much as 2.3 percent to 388.8 yen before trading at 383 yen.

Cash Prices

Cash prices in Thailand, the largest exporter, extended gains as increasing demand outpaced supply, the Rubber Research Institute of Thailand said on its website.

Thai RSS-3 grade rubber for June delivery added 0.8 percent to 126.40 baht ($3.89) a kilogram yesterday, according to the institute, which reviews the price once a day and issues new data in the afternoon.

China’s Purchasing Managers’ Index fell to 53.9 from 55.7 in April, seasonally adjusted, the Federation of Logistics and Purchasing said today. That was less than the median 54.5 estimate in a Bloomberg News survey of 18 economists. Readings above 50 indicate an expansion.

A government crackdown on property speculation is cooling the economy by damping sales and construction, while Europe’s sovereign-debt crisis could exacerbate a slowdown by cutting demand for exports. China’s policy makers may delay raising benchmark interest rates or letting the yuan appreciate even after the economy grew 11.9 percent in the first quarter.

September-delivery rubber on the Shanghai Futures Exchange dropped 0.2 percent to 22,790 yuan ($3,338) a ton.

(bloomberg.com)

Rubber Futures in Tokyo Fall as Much as 1.7%, Paring Gains

By Suppunnabul Suwannakij

June 1 (Bloomberg) -- Rubber futures declined as much as 1.7 percent to 280.4 yen a kilogram, paring earlier gains.

Futures for November delivery on the Tokyo Commodity Exchange traded at 281.5 yen a kilogram at 1:28 p.m.

(bloomberg.com)

IRCo's WEEKLY MARKET SNAPSHOT: 24 - 28 May 2010

IRCo's DCP entered into a consecutive second week of gains by 8.94 US cents per kg. to rise above US $3.00 per kg. after two weeks of hovering below this level.

Supply continued to be tight even though it was off-wintering season. Demand remained strong with most consumers at very tight inventory positions.

Overall sentiments were positive and strong as worries of the eurozone contagion simmered down pushing both futures and equity markets into recovery, along with prices for crude oil. Regional currencies were mixed against the greenback with gains notched by the Indonesian rupiah and Malaysian ringgit but not the Thai baht. The Japanese yen also slipped against the the US dollar.

The markets in the region were closed on Friday, 28 May for the Buddhist Vesak Day.

(Irco.biz)

Rubber Climbs for Fourth Day on Low Supplies, Crude Oil Rally

By Aya Takada and Supunnabul Suwannakij

May 31 (Bloomberg) -- Rubber advanced for a fourth day, paring a monthly loss, as low supplies from major producers and a rally in crude oil enhanced the appeal of the commodity used to make tires.

Futures in Tokyo extended two weeks of gains amid concerns that supplies may not be adequate to meet growing demand. Crude oil rose for third time in four days after the dollar fell against the euro, bolstering the appeal of commodities as a hedge against inflation.

“Supplies remain low,” Chaiwat Muenmee, an analyst at broker DS Futures Co., said by phone from Bangkok. “Coupled with rising oil prices, it helped boost gains on Tocom.”

Depleted supply after the end of the annual February-to- April low-production season, together with robust demand in Asia, will support the market, the Association of Natural Rubber Producing Countries said in its May newsletter.

Demand from China, India and Malaysia, which account for more than 45 percent of global consumption, should stay strong, the association said.

Rubber for November delivery, the most-active contract, rose as much as 0.8 percent to 287.2 yen per kilogram ($3,142 a metric ton) before settling at 285.1 yen on the Tokyo Commodity Exchange. It fell as much as 1.2 percent earlier.

“The market remains capped by concern that Europe’s debt crisis will stall economic recovery,” Kazuhiko Saito, an analyst at commodity broker Fujitomi Co. in Tokyo, said today.

Debt Concerns

Still, the most-active contract dropped for a second month, losing 2.7 percent, after investors reduced holdings of risky assets amid concern that Europe’s debt crisis will spur governments to reduce spending, slowing the region’s economic recovery. The yen fell to a one-week low after Japan’s Social Democratic Party left the three-way coalition government.

Fitch Ratings cut Spain’s AAA credit rating by one level last week, saying the nation’s debts will likely weigh on growth. Spain has the third-largest budget deficit in the euro region, where policy makers have pledged almost $1 trillion of loans to support the weakest economies and the regional currency. The rating cut for Spain increased concern that raw material demand in Europe may slow.

“A sense of caution is increasing,” said Norikazu Kitta, a strategist at Nikko Cordial Securities Inc. “Financial issues in Europe are spreading.”

Rubber cash prices in Thailand, the largest exporter, extended gains as increasing demand outpaced supply, the Rubber Research Institute of Thailand said on its website today.

Thai RSS-3 grade rubber for June delivery added 0.8 percent to 126.40 baht ($3.89) a kilogram today.

September-delivery rubber on the Shanghai Futures Exchange dropped 0.5 percent to settle at 22,845 yuan ($3,346) a ton. 

(bloomberg.com)

Rubber seen steady as rains to cut supply, demand

MUMBAI: Indian rubber futures are likely to trade in a range this week as rains in the top producing state may cut spot supplies as well as buying by tyre makers, analysts and traders said on Monday. 

Monsoon rains, vital for farm output in India's trillion-dollar economy, have hit the country's southern Kerala coast as scheduled, the chief of the weather office said on Monday. Kerala is the biggest producer of rubber in the country. "Rains have come. Obviously arrivals will go down in coming weeks. Tyre companies also cut buying in monsoon months," said Shiji Abraham, analyst with JRG Wealth Management. 

"I am not expecting much volatility in prices this week." Tyre companies reduce their inventories during rains as humidity leads to fungus attacks, hurting demand during monsoon, Abraham said. 

The benchmark July contract on the National Multi-Commodity Exchange (NMCE) was down 2.2 percent at 16,558 rupees per 100 kg. The contract may test support at 16,450 rupees, Abraham said. Spot price of the most traded RSS-4 rubber (ribbed smoked sheet) eased by 100 rupees to 16,950 rupees per 100 kg in Kottayam, Kerala, Rubber Board data showed. 

It rose to an all time high of 17,050 last week because of lower supplies and robust demand, and is still trading up 3,050 rupees in 2010. India's rubber production is likely to rise 7.5 percent to 893,000 tonnes in 2010/11 helping reduce costlier imports, a senior Rubber Board official said last month. Tokyo rubber futures held firm on Monday near a three-week high as crude oil firmed, while physical prices were also mostly steady. 

(economictimes.indiatimes.com)

Spot rubber ends steady

The spot rubber ended steady on Saturday (29 May 2010). The trading activities were in a low key as the trend setting international markets were on weekend holidays. Sheet rubber ended unchanged at Rs 171 per kg amidst scattered transactions.

The June futures for RSS 4 declined to Rs 169.8180 (170.97), July to Rs 169.38 (170.02), August to Rs 163 (163.22) and September to Rs 157.30 (157.95) a kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 171 (171); RSS-5: 169 (169); ungraded: 167.50 (167.50); ISNR 20: 152 (152) and latex 60 per cent: 110 (110).

(indiainfoline.com)

Rubber farmers slam demand by tyre firms for easing duty

hiruvananthapuram: Rubber growers have strongly criticised the tyre industry’s demand to lower the import duty on natural rubber and a ban on futures trading on the grounds that such a demand has no rational. The tyre makers had demanded lowering of the import duty and a ban on futures trading because of a over 13% rise in natural rubber prices in the last few days.

In a memorandum to Union commerce ministry this week, the growers point out that while consumer industry had imported about 1,52,000 million tonne this year, most of these were without any customs duty, availing export incentives.

India’s tyre export had grown 30% this year, the memorandum said. The end-user contends that if imports are not eased, it could impact their raw material sourcing needs. To which the rubber industry’s contention is that they (the rubber industry) are committed to increase productivity.

“All stakeholders have evolved a long-term strategy to boost productivity to meet the requirement of 15 lakh tonne of quality rubber by 2020,” Siby Monipally, general secretary, Indian Rubber Growers’ Association, also a member of the Rubber Board, told FE.

“When rubber price is up, it is the real farmer, not the intermediaries, who gain,” Monipally argued.

(economictimes.indiatimes.com)

Natural Rubber Outlook ‘Bearish’ on China Tightening

May 29 (Bloomberg) -- Rubber prices may fall as tightening in China’s real estate market may cut demand, an executive at Sinochem International Corp. said.

“The property market is a concern,” Yao Xingliang, vice general manager at Sinochem, said today at a conference in Shanghai. “If the property market weakens, transportation will be greatly reduced, threatening rubber demand from the tire industry.” Sinochem is China’s biggest rubber trader and the country is the world’s largest consumer of the material.

Rubber in Tokyo reached a 21-month high in April on concern about reduced output and as economies recovered from recession, stoking sales of cars and tires. China has restricted banks from extending loans for purchases of multiple homes, increased mortgage rates and raised down payment requirements in an attempt to deflate real estate bubbles.

“We are generally bearish on the natural rubber outlook later this year after prices had a big jump last year,” and amid government tightening measures and the external situation, said Yao.

Rubber on the Tokyo Commodity Exchange has gained 3.2 percent this year after doubling in 2009 as the rally slowed on concern the debt crisis in Europe will stall the economic recovery. The contract for November delivery gained 1.2 percent yesterday to close at 284.8 yen per kilogram. Futures reached a 21-month high of 338.5 yen on April 16.

‘Downside Limited’

Shares of China Vanke Co. and Poly Real Estate Group Co., China’s two biggest property developers, have fallen at least 30 percent this year after the government tightened bank lending. Housing prices surged a record 12.8 percent last month, even after the government intensified a crackdown on speculation to limit the risk of asset bubbles and keep housing affordable.

Still, “we also think the downside is limited given the economic recovery,” Sinochem’s Yao said. The market bottom for rubber in China is about 20,000 yuan ($2,928) a ton, he said. That’s about 13 percent below the closing price yesterday on the Shanghai Futures Exchange where the September contract ended at 22,950 yuan a ton.

Rubber may climb at least 25 percent to the highest level in three decades as demand increases in China outweighing concern European use will slow, Kazuya Tetsu, executive manager at broker Yutaka Shoji Co., said May 27. Car ownership in China, the world’s largest auto market, will expand, boosting consumption of the raw material used in tires, Tetsu said.

Sales Rise

China’s vehicle sales may rise 17 percent this year to 16 million as annual demand for automobiles may eventually exceed 30 million, an official at the State Information Center said last month.

The nation’s vehicle sales surged 46 percent last year to 3.6 million units, overtaking the U.S. as the world’s biggest auto market, after the government reduced the consumption tax on small vehicles and gave subsidies to encourage buying in rural areas.

(businessweek.com)

Rubber Futures in Tokyo Climb as Much as 2.1% to 287.2 Yen/Kg

By Aya Takada

May 28 (Bloomberg) -- Rubber futures in Tokyo advanced as much as 2.1 percent to 287.2 yen a kilogram. The November- delivery contract reached the highest level in three weeks.

(bloomberg.com)

Rubber May Jump 25% to 30-Year High on China, Japan Broker Says

By Aya Takada and Yasumasa Song

May 28 (Bloomberg) -- Rubber may climb at least 25 percent to the highest level in three decades as demand increases in China, the largest consumer, outweighing concern European use will slow, said an executive manager at broker Yutaka Shoji Co.

Futures may surpass the 2008 peak of 356.9 yen per kilogram ($3,922 a metric ton) on the Tokyo Commodity Exchange this year to reach the highest level since March 1980, said Kazuya Tetsu, who traded the commodity for more than 30 years at Marubeni Corp. before joining Yutaka Shoji last month.

Prices gained 3.6 percent this year after doubling in 2009 as the rally slowed on concern the sovereign debt crisis in Europe will stall the economic recovery, hurting demand for commodities. Car ownership in China, the world’s largest auto market, will expand, boosting consumption of the raw material used in tires, Tetsu said in an interview in Tokyo.

“China’s influence on the market and global economies is getting stronger,” Tetsu said yesterday. Demand from the country “is setting the market’s direction,” he said.

Rubber for November-delivery, the most-active contract in Tokyo, gained 1.8 percent to 286.20 yen at 2:17 p.m. local time today. The price reached a five-month low of 250.9 yen on May 17, down from a peak of 338.5 yen about a month earlier.

A price jump will benefit producers in Thailand, Indonesia and Malaysia, the biggest suppliers, and potentially boost costs for tire makers such as Bridgestone Corp. Marubeni is the country’s biggest trader of the commodity and Yutaka is one of the top five raw-materials brokerages.

Inflation Hedge

The European debt turmoil may force governments to keep interest rates low and delay implementation of their “exit policy”, leading to renewed investor interest in commodities as an inflation hedge, Tetsu said. Europe represented 15 percent of global consumption estimated at 10.2 million tons in 2008, according to International Rubber Study Group.

Sales of cars, sport-utility vehicles and multipurpose vehicles in China jumped 33 percent from a year earlier to 1.11 million units in April, according to the China Association of Automobile Manufacturers. In the first quarter sales jumped 76 percent to 3.52 million units.

Consumption of natural rubber in China may grow 10 percent this year to 3.35 million tons from 2009, the Association of Natural Rubber Producing Countries said in its May report.

Supplies of natural rubber may increase seasonally, helping curb prices on the cash market, Kazunori Kokubo, general manager at the international business section of Yutaka Shoji, said in the same interview.

Narrow Gap

“Tightness in supply will probably be alleviated in July as the influence from wintering will diminish,” he said. Trees shed their leaves during wintering, or the low-production period that runs from February to April, leading to lower latex output.

The increase in production may narrow the price gap between the nearby month on the Tokyo exchange and the most active contract, Kokubo said. June-delivery rubber added 1 percent to 373 yen at 2:06 p.m. local time.

Total production of natural rubber will grow 6.2 percent to 9.37 million tons this year, according to the ANRPC report. The association represents Cambodia, China, India, Malaysia, Indonesia, Papua New Guinea, Philippines, Singapore, Sri Lanka, Thailand and Vietnam.

Cash prices in Thailand, the largest producer and exporter, increased as rains in southern provinces disrupted tapping, according to the Rubber Research Institute of Thailand. Thai RSS-3 grade rubber for June delivery rose 1.6 percent to 125.40 baht ($3.85) a kilogram, the institute said on its website yesterday. The price climbed to a record 130.55 baht April 27.

(bloomberg.com)

Rubber Has Best Weekly Gain Since December as Demand Recovers

By Aya Takada

May 28 (Bloomberg) -- Rubber climbed for a third day and booked the largest weekly gain since December as a rally in oil raised the appeal of the commodity and an advance in equities boosted investor interest in risk assets.

Futures in Tokyo advanced as much as 2.6 percent to the highest level since May 6. The price has climbed 6.8 percent this week, the best performance since the week ended Dec. 18.

Oil was poised for its first weekly gain in four weeks after China affirmed its commitment to investing in Europe and U.S. reports signaled that energy demand may recover with an economic rebound. Asian stocks climbed for a third day, after China said a report that it was reviewing foreign-exchange holdings of euro assets was “groundless.”

“Sales spurred by Europe’s debt concern have subsided after the report from China,” Hisaaki Tasaka, an analyst at Tokyo-based commodity broker ACE Koeki Co., said today by phone. “Rubber tracked a recovery in oil and stocks.”

Rubber for November delivery, the most-active contract, gained as much as 7.3 yen to 288.6 yen per kilogram before settling at 284.8 yen on the Tokyo Commodity Exchange.

The price may surpass the 2008 peak of 356.9 yen per kilogram this year to reach the highest level since March 1980, Kazuya Tetsu, executive manager at Tokyo-based broker Yutaka Shoji Co., said in an interview yesterday.

Market Direction

“China’s influence on the market and global economies is getting stronger,” Tetsu said. Demand from the country “is setting the market’s direction,” he said.

The European debt turmoil, which triggered a selloff of the raw material this month, may force governments to keep interest rates low and delay implementation of their “exit policy,” leading to renewed investor interest in commodities as an inflation hedge, he said.

Crude rose 4.3 percent yesterday to settle at $74.55 and was little changed today. The MSCI Asia Pacific Index gained 1.5 percent to 113.36, extending a global rally.

“Investors’ concerns are mitigated by China’s intention to invest in Europe,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc.

Futures also increased after cash rubber prices in Thailand, the largest producer and exporter, increased. Thai prices extended gains as rain in some southern provinces disrupted tapping, lowering supply, the Rubber Research Institute of Thailand said on its website.

Thai RSS-3 grade rubber for June delivery rose 1.6 percent to 125.40 baht ($3.85) a kilogram yesterday, according to the institute. Thailand’s market is closed today for a public holiday.

September-delivery rubber on the Shanghai Futures Exchange added 1.4 percent to settle at 22,905 yuan ($3,353) a ton.

(bloomberg.com)

Gold a ‘Good Choice’ for Boosting Global Use of Yuan

By Bloomberg News

May 28 (Bloomberg) -- China’s trade in yuan-denominated gold investment products moves the currency closer toward global acceptance and the country should develop more of them, a central bank official said.

Pricing commodities in the currency “helps China’s goal to internationalize the yuan,” Wang Zhenying, deputy director- general of the Department of Financial Management at the Shanghai office of the People’s Bank of China, said today. “Gold is a good choice to have yuan trading.”

Gold consumption in China, the world’s biggest producer, may double within the next 10 years as supplies fail to keep pace with demand from investors and the jewelry industry, the World Gold Council said in March. China, the world’s largest holder of foreign exchange reserves, is seeking greater use of its currency to reduce reliance on the dollar.

“We agree that yuan-denominated gold trading will help enhance the yuan’s global status,” Chen Shiyong, general manager of financial markets at Industrial Bank Co., said in interview today. “We also would like to be part of the efforts to increase gold investment products available to the public.”

The trading volume of the gold contract on the Shanghai Futures Exchange fell 12 percent last year, compared with an almost fourfold advance for copper, 92 percent increase in rubber and 39 percent gain for aluminum, according to bourse data.

International Status

“Although the gold market only accounts for about 1/400- 1/500 of China’s financial markets, the meaning of it is going to be significant,” Wang said. “A currency’s international status depends on its being accepted in trade and settlement and having certain financial products priced in that currency.” He said his views were his own and did not represent central bank policy.

Bullion prices have gained 11 percent in this year as the global recession and spiraling European debt crisis spurred demand for haven assets. Gold for immediate delivery was little changed at $1,214.30 an ounce at 5:53 p.m. in Shanghai. The metal reached a record $1,249.40 an ounce on May 14.

The December contract on the Shanghai Futures Exchange gained 0.4 percent to close at 267.68 yuan a gram, after earlier dipping 0.5 percent. Gold accounts for 1.6 percent of The People’s Bank of China’s $2.4 trillion total reserves, according to the World Gold Council.

China plans to expand settlements of international trade using yuan to as many as 18 more provinces and cities to meet rising demand from companies, two bankers involved in the program said this month.

Cross-Border

Authorities may permit them in areas including Guangxi in the south and Heilongjiang in the north, said the executives at Chinese state-controlled banks, who asked not to be identified before a government announcement.

Beijing started allowing companies in Shanghai and four cities in the southern province of Guangdong from July 2009 to use yuan in trade with Hong Kong, Macau and members of the Association of Southeast Asian Nations.

Full internationalization of the yuan will take 15 to 20 years, Dai Xianglong, chairman of China’s National Council for Social Security Fund, said last month. This doesn’t mean the currency will displace the dollar, which will remain dominant in the global currency system, he said.

“We have more than 30 trillion yuan worth of savings in deposits and the lack of investment products have contributed to Chinese investors going into mungbeans and garlic lately,” the central bank’s Wang said. “We can develop more gold products to attract investor demand.”

ETF Potential

China’s gold output reached 314 metric tons in 2009, ranking as the No. 1 in the world for the third year. Demand from investors and the jewelry industry, which account for 80 percent of purchases in the country, reached 423 tons in 2009, according to the World Gold Council’s data.

“China should develop its exchange-traded market instead of the over-the-counter market,” Wang said. “The financial crisis showed us the advantages of the exchange trading in terms of market concentration, timely release of information, efficiency and liquidity.”

Gold is traded in yuan on the Shanghai Futures Exchange and the Shanghai Gold Exchange.

(bloomberg.com)

User industries ask PMO to intervene on rubber prices

In a sequel to the High Court of Delhi telling the Union government to consider rubber user industries’ plea for price controls on the crucial product, the rubber user industries have asked the Prime Minister’s Office to move swiftly on the matter.

Natural rubber prices continue to rise, by Rs 2-3 a kg every second day, goes the plea from the same three parties who’d petitioned the HC — the All India Rubber Industries Association (AIRIA), the Automotive Tyre Manufacturers Association and the Indian Cycle and Rickshaw Tyre Manufacturers Association.

Since May 10, when the benchmark grade RSS-4 variety ruled at Rs 151 a kg, the price had moved up to Rs 170 a kg on May 25, according to Rubber Board data.

“While the government is safeguarding the interests of rubber growers, the future of five million people employed in around 5,000 rubber units across the country has been grossly overlooked. Many such units, particularly those in the small and medium enterprises sector, are on the verge of closing down, as rubber prices continue to rise at an unprecedented pace, and even at such prices, adequate rubber is not available,” said T K Mukherjee, president of the AIRIA.

The petitioners complain the option of import of rubber is not feasible, as the government continues to charge a 20 per cent tariff on this, although finished rubber goods can be imported at less than 10 per cent duty.

According to the communication, the production of natural rubber in the country lagged consumption by 1,00,000 tonnes in 2009-10. In 2010-11, NR production is likely to lag consumption by 1,75,000 tonnes, it contends.

AIRIA has urged import of 2,00,000 tonnes of duty-free rubber to survive the shortage and to cool the rising prices.

The three associations had petitioned the HC in Delhi to order th government to regulate NR prices and also ban futures trading in it, beside some related measures. The HC order, given earlier this week, asked the government to consider the matter carefully and give detailed reasons for whatever action it chose to do or not do. Only after that, it said, would there be a case for asking the courts to intervene.

(business-standard.com)

Rubber Advances to Three-Week High as Oil Gains, Yen Declines

By Aya Takada and Supunnabul Suwannakij

May 27 (Bloomberg) -- Rubber advanced for a second day to the highest level in three weeks as a rally in crude oil and limited supplies from Thailand, the largest producer, boosted demand for the commodity used to make tires.

Futures in Tokyo were also bolstered by a fall in Japan’s currency against the dollar, which raised the appeal of yen- denominated contracts. The yen weakened as signs that Asia- Pacific economies are recovering sapped demand for Japan’s currency as a refuge.

“Overall sentiment is bullish” given the gains in oil and other commodities, Kazunori Kokubo, general manager of the international business department at commodity broker Yutaka Shoji Co., said by phone from Tokyo.

Rubber for November delivery, the most-active contract on the Tokyo Commodity Exchange, rose as much as 3 percent to 281.90 yen per kilogram ($3,122 a metric ton) before settling at 281.3 yen. Earlier, it fell to 272 yen on concerns that Europe’s debt crisis may stall economic recovery in the region.

Oil futures in New York climbed as much as 1.5 percent, boosting the cost of making synthetic rubber from naphtha. The yen declined to 110.54 per euro as of 6:40 a.m. in London from 109.47 in New York yesterday.

The most-active rubber contract gained 5.5 percent this week, a second weekly gain, amid worries that there’s continued tight supply from major producing countries. The “supply situation hasn’t improved,” Kokubo said.

Tight Supply

The low supply from key producers together with robust demand in Asia will keep the market strong, the Association of Natural Rubber Producing Countries said in its May newsletter on May 25. Demand from China, India and Malaysia, which account for more than 45 percent of global consumption, should stay robust, the association said.

Cash prices in Thailand, the largest exporter, extended gains as rains in some southern provinces disrupted tapping, lowering supply, the Rubber Research Institute of Thailand said on its website today. Processers continued purchases on worries there’s a supply shortage, it said. Thai RSS-3 grade rubber for June delivery rose 1.6 percent to 125.40 baht ($3.85) a kilogram.

September-delivery rubber on the Shanghai Futures Exchange added 0.8 percent to settle at 22,585 yuan ($3,306) a ton.

(bloomberg.com)

Vietnam's May Rubber Exports Declined

By Siwaporn Bumroongpan

27 May 2010 - Vietnam’s rubber exports for May is estimated about 20,000 tonnes, down 53.5% from the same period in 2009, according to the Government’s General Statistics Office. In terms of value, it is estimated down by 6.2% from US $64 million to US$60 million compared with the same month last year.

For the first 5 months of 2010, Vietnam rubber export is estimated at about 176,000 tonnes, with a value of US $479 million, which up 85.5% in value, but down 4.4% in volume when compared with the same period the previous year.

For the first quarter of the year, Vietnam exported 123,000 tonnes of rubber, valued at US $325 million.

For the month of April, the export was at 32,750 tonnes, worth US $94.14 million, raising the total export volume for Jan-Apr to 155,750 tonnes for total value of US$419.48 million, up 10.6 percent and 5.6 percent, respectively against the same period of 2009. 

(irco.biz)

Surging tyre import worries rubber sector

KOCHI: A rising tide of Chinese-made two-wheeler tyre import has the domestic tyre industry and rubber planters worried. 

The import of two-wheeler tyres (mostly for motorcycles) has seen a sharp rise to 3.23 lakh tyres in 2009-10 from 21,137 in 2008-09. Automobile Tyre Manufacturers Association (ATMA) spokesmen said nearly 80-90% of this import is from China. 

According to automobile industry spokesmen, the two-wheeler tyre import could follow the trend seen in truck tyre shipment. The import of truck tyres increased from 80,000 to 13-14 lakh tyres in 5 years. 

Speaking to ET, Mr Rajiv Budhraja, ATMA director general, said, “The industry is keeping a close watch on the import scenario and will take a call on the development soon.” The import price is sometimes as low as $5 for motorcycle tyres and $1.2 for tubes as some importers take advantage of dumping and under-invoicing.

(economictimes.indiatimes.com)

Asian rubber producers mull setting up regional cash market

* Consortium represents 70 percent of global rubber output

* Futures seen distorting market fundamentals

By Apornrath Phoonphongphiphat

BANGKOK, May 25 (Reuters) - Thailand, Indonesia and Malaysia, the world's top three rubber producers, want to set up a cash market for the commodity that would make pricing more transparent and stabile, industry officials said on Tuesday. A regional rubber market might also reduce the influence on physical prices of futures markets such as the Tokyo Commodity Exchange (TOCOM), said Abdul Rasip Latiff, chief executive officer of the IRCo.

The IRCo, or International Rubber Consortium, groups rubber industry officials, exporters and government officials from the three countries that account for 70 percent of world rubber output.

"The concept has been agreed upon and a special committee of experts has been established to study the feasibility of this concept in greater detail," Latiff said in an IRCo statement.

Cash prices are relatively high at the moment, with the benchmark Thai RSS3 offered at $3.80 per kg on Tuesday,

Prices have been extremely volatile in recent years, hitting a record high of $4.10 per kg in April as the dry season cut latex output at a time of strong demand.

Traders, producers and end-users, mostly tyre makers, have blamed the volatility to some extent on the speculative nature of trading on TOCOM, which has overshadowed the fundamentals in the physical market.

The cash market would be located in one of the three countries and would include warehouses and a clearing house, where buyers and sellers would commit to physical deals with specified shipment dates, said a senior official at the IRCo, who asked not to be named.

Although there are local markets in several key rubber areas in the three countries, such as Hat Yai in Thailand, the IRCo believes a regional market would help increase the influence of fundamental factors.

"The regional rubber market will help reflect real supply and demand on the fundamental side as well as discover appropriate price levels," another IRCo official said.

Most traders welcomed the idea of setting up a cash rubber market in the region, agreeing it would help stabilise prices and give buyers and sellers a centre for exchanging rubber, but they had reservations.

In particular, they felt big players might be able to influence prices more easily if there was one market.

"The concept is good, but the question is, how can they assure us there'll be no collusion? Otherwise they would fail to stabilise prices," a Malaysian trader said.

(in.reuters.com)

Rubber Advances as Crude Oil Rally, Low Supply Boost Appeal

By Jae Hur and Supunnabul Suwannakij

May 26 (Bloomberg) -- Rubber advanced as crude oil rebounded, improving the appeal of the commodity used to make tires, amid concerns of dwindling supplies in producing countries after the low-production season.

Futures in Tokyo rose as much as 2.8 percent as crude oil rose to more than $70 a barrel after a report showed a drop in gasoline stockpiles in the U.S. A gain in oil boosts the cost of synthetic rubber made from petroleum.

Rubber also climbed as “supplies from major producers have remained tight,” Takaki Shigemoto, analyst at research and investment company JSC Corp. in Tokyo, said today by phone.

Depleted supply from key producers after the low-production season will keep the market strong, the Association of Natural Rubber Producing Countries said in its May newsletter. Trees shed their leaves during the wintering season that runs from February to April, lowering latex output.

The October delivery contract climbed as much as 7.6 yen to 278.6 yen a kilogram ($3,092 a metric ton) on the Tokyo Commodity Exchange before settling at 275.9 yen. The new contract for November delivery settled at 273.7 yen after opening at 275 yen.

September-delivery rubber on the Shanghai Futures Exchange rose 1.8 percent to settle at 22,410 yuan ($3,280) a ton.

“The tight supply news helped boost rubber,” Chaiwat Muenmee, an analyst at broker DS Futures Co., said by phone from Bangkok. The shortage won’t last long “as more supplies are expected to come into the market next month,” he said.

Robust Demand

Ribbed smoked sheet RSS-3 grade rubber output may average 200 metric tons a day next month, compared with more than 100 tons a day in May, said Chaiwat.

Demand in China, India and Malaysia, which account for more than 45 percent of rubber consumption, should stay robust, said the association, which represents 94 percent of output.

Imports by China rose 17 percent to 602,000 tons in the January-April period and demand, including that for compound rubber, rose 26 percent to 1.05 million tons, according to the association. Consumption of natural rubber in India during the first four months rose 12 percent to 316,000 tons, it said.

Cash prices extended gains as a shortage of supplies prompted rubber processors to accelerate purchases, the Rubber Research Institute of Thailand said on its website today. Thai RSS-3 grade rubber for June delivery gained 0.2 percent today to 123.40 baht ($3.79) a kilogram, the institute said.

(bloomberg.com)

TOCOM May rubber expires, fewest deliveries since February

TOKYO, May 25 (Reuters) - The May rubber futures contract on the Tokyo Commodity Exchange expired on Tuesday at 377.9 yen per kg, up 0.1 yen on the day, with 102 lots or 510 tonnes of deliveries, the fewest since the February contract at 56 lots.

A month earlier, the April contract expired at a record high price of 455.4 yen per kg with 142 lots delivered.

The relatively small deliveries in the past few months were due to limited supply available via TOCOM as prices in the physical market stayed high, traders said.

Prices of the next spot June contract <0#JRU:> are set to firm again when its expiry date of June 24 nears because rubber supply is unlikely to increase drastically until July, said a manager at a Japanese commodity brokerage.

"But for now, such influence from the spot contract is tame as we have one month to go. The rubber market rather looks vulnerable to bearish views in other markets and is set to fall in the near term," the manager said, adding the key TOCOM contract would soon test technical support of 260 yen a kg.

On Tuesday, the key October contract fell 6.2 yen to 271.0 yen per kg. [RUB/AS] Newly-listed November contract takes over the benchmark status when it starts trading on Wednesday.

(in.reuters.com)

Rubber growers get Rs.95 lakh assistance for 2010-1

The government Wednesday said 18,915 rubber growers will receive financial assistance of Rs.95 lakh this financial year.

The growers will receive the amount on the basis of price spectrum band 2009, calculated on the basis of seven years' moving average of international price for the commodity.

The amount has been provided under the price stabilisation fund scheme, which was launched by the commerce ministry in April 2003 with the aim to provide financial relief to tea, coffee, natural rubber and tobacco growers when the prices of these commodities fall below a specified level.

The scheme is based on the principle of contribution from the growers and from the government depending upon boom, normal and distress years. During the distress year, the growers can withdraw from the scheme.

The annual average domestic price for rubber was Rs.97.56 per kg during 2009 and it was a normal year for rubber, an official statement said.

Spot rubber turns weak

On Tuesday (25 May 2010), the spot rubber market turned weak as the market failed to break above Rs 170 per kg for sheet rubber and the grade moved down to Rs 168 (170) mainly on selling from dealers following the sharp declines on National Multi Commodity Exchange (NMCE).

The June futures for RSS 4 declined to Rs 164.51 (168.86), July to Rs 163.98 (168.59), August to Rs 156.01 (160.59) and September to Rs 151.26 (153.75) a kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 168 (170); RSS-5: 166 (167); ungraded: 163 (165); ISNR 20: 149 (149) and latex 60 per cent: 106 (106).

(indiainfoline.com)

JK Tyre says to raise prices by 3-4 pct in June

NEW DELHI, May 25 (Reuters) - JK Tyre and Industries (JKIN.BO: Quote, Profile, Research) plans to increase prices of its products by 3-4 percent in June, on surging costs of raw material, especially rubber, Managing Director Raghupati Singhania said on Tuesday.

The firm has already raised prices by 5 percent since January.

It expects 30-35 percent revenue growth in FY11 as vehicle sales boom, but profitability may be under pressure due to the rise in raw material prices, Arun K Bajoria, president, said.

Natural rubber makes up over 40 percent of the cost of a tyre. It has risen 21.5 percent to 16,900 rupees per 100 kilograms so far this year.

Earlier on Tuesday JK Tyre had reported an 82 percent rise in Jan-March net profit to 255 million rupees. Its quarterly net sales rose to 11.3 billion rupees from 9.26 billion rupees.

JK Tyre shares ended down 1.74 percent at 177.75 rupees in a weak Mumbai market.

(in.reuters.com)

Rubber Gains to One-Week High as Thai Riots May Disrupt Supply

By Aya Takada

May 20 (Bloomberg) -- Rubber advanced to the highest level in more than a week as clashes between security forces and protesters in Thailand raised concern that supply from the world’s largest exporter may be disrupted.

Futures in Tokyo gained for a third day, advancing as much as 2.3 percent to the highest level since May 11, as fighting continued in Bangkok a day after the forced surrender of anti- government protesters left 16 people dead.

Rioters set fire to 31 buildings including several banks in Bangkok, Thanom Onketpol, an adviser to the city’s governor, said on the PBS television network. Protesters also torched a city hall in Udon Thani province and seized a government building in Khon Kaen, both in the northeast of the country. Thailand is the world’s largest producer and shipper of rubber.

“Riots in Thailand were spreading from Bangkok to other areas, raising concern that violence may escalate further and disrupt transportation of the raw material,” Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo, said today by phone.

Rubber for October delivery, the most-active contract, gained as much as 6.1 yen to 273.8 yen per kilogram ($2,984 a metric ton) before trading at 269.3 yen on the Tokyo Commodity Exchange at 11:52 a.m. local time.

The price earlier declined to as low as 262.6 yen as a drop in equities markets raised speculation that economic growth may stall. Asian stocks fell for the fifth straight day amid concern that Europe’s debt crisis may derail a recovery as governments take austerity measures to reduce deficits.

Risk Appetite

The risk appetite of investors also dropped as Germany this week introduced a temporary ban on naked short selling to calm the region’s financial markets.

“Germany’s short-sale restriction is prompting suspicion that the situation is actually worse than investors think,” said Mitsushige Akino, who oversees the equivalent of $450 million at Ichiyoshi Investment Management Co.

Rubber futures have retreated 20 percent after climbing to a 21-month high of 338.5 yen on April 16 on a seasonal drop in supply from Thailand.

Producers in Thailand’s south, the major growing area, have resumed tapping rubber trees as the low-production period known as wintering ends, Shigemoto said.

Thai shippers offered so-called RSS-3 grade rubber for July shipment at $3.50 a kilogram yesterday, up from $3.15 on May 14, he said.

September-delivery rubber on the Shanghai Futures Exchange added 0.5 percent to 21,955 yuan ($3,216) a ton at 10:58 a.m. local time.

(bloomberg.com)

Rubber Drops, Reversing Earlier Gains, as Asian Stocks Slump

By Aya Takada

May 20 (Bloomberg) -- Rubber declined, reversing earlier gains, as a slump in Asian stocks raised concern that the economic recovery may stall and reduce demand for the raw material used in tires.

Futures in Tokyo dropped for the first day in three. The price reached the highest level since May 11 earlier as clashes between Thai security forces and protesters stoked concern that supply from the world’s largest exporter may be disrupted.

Asian stocks tumbled after slower-than-estimated growth in Japan drove Tokyo shares lower for a second day. While the Japanese economy grew at the fastest pace in three quarters, the 4.9 percent expansion was less than the 5.5 percent median forecast of 21 economists in a Bloomberg survey.

“Losses in the equities markets eroded investor confidence in the recovery, leading to sales of rubber futures,” Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo, said today by phone.

Rubber for October delivery, the most-active contract, lost 1.5 percent to settle at 263.8 yen per kilogram ($2,886 a metric ton) on the Tokyo Commodity Exchange.

The MSCI Asia Pacific Index lost 1.7 percent to 112.81 at 4:53 p.m. in Tokyo, while Japan’s Nikkei 225 Stock Average fell 1.5 percent to 10,030.31. Japan’s Finance Minister Naoto Kan warned that the economy was in a deflationary state.

Risk Appetite

The risk appetite of investors also dropped after Germany this week introduced a temporary ban on naked short-selling to calm the region’s financial markets.

“Germany’s short-sale restriction is prompting suspicion that the situation is actually worse than investors think,” said Mitsushige Akino, who oversees the equivalent of $450 million at Ichiyoshi Investment Management Co.

Losses in rubber futures were limited as fighting continued in Bangkok a day after the forced surrender of anti-government protesters left 16 people dead.

Rioters set fire to 31 buildings including several banks in Bangkok, Thanom Onketpol, an adviser to the city’s governor, said on the PBS television network. Protesters also torched a city hall in Udon Thani province and seized a government building in Khon Kaen, both in the northeast of the country.

“Riots in Thailand were spreading from Bangkok to other areas, raising concern that violence may escalate further and disrupt transportation of the raw material,” Shigemoto said.

Rubber futures have retreated 22 percent since reaching a 21-month high of 338.5 yen on April 16 on a seasonal drop in supply from Thailand.

Producers in Thailand’s south, the major growing area, have resumed tapping rubber trees as the low-production period known as wintering ends, Shigemoto said.

Cash prices in Thailand advanced on concerns that supplies will remain low because of drought, the Rubber Research Institute of Thailand said on its website today.

The price of Thai RSS-3 grade rubber for June delivery, which excludes freight and insurance, gained 1.7 percent today to 117.85 baht ($3.64) a kilogram, it said.

September-delivery rubber on the Shanghai Futures Exchange dropped 0.4 percent to 21,765 yuan ($3,188) a ton, reversing an earlier advance of 2.4 percent.

(bloomberg.com)

Rubber Futures in Tokyo Reverse Gains as Stock Market Declines

May 20 (Bloomberg) -- Rubber futures in Tokyo reversed earlier gains as Asian stocks dropped, raising concern that the economic recovery may stall.

The October-delivery contract lost 0.7 percent to 265.9 yen per kilogram at 2:49 p.m. local time. The price gained as much as 2.3 percent to 273.8 yen earlier.

(bloomberg.com)

China is the largest buyer of Malaysian rubber

Market Review on Rubber

Rubber advanced for the first time in three days as rising crude oil prices improved the appeal of the raw material used to make tyres. Futures gained as much as 1.9 percent after falling 3.6 percent on Monday to the lowest close in five months. Rubber has tumbled 24 percent since climbing to a 21-month high of 338.5 yen April 16. Tocom rubber opened higher on bargain hunting, stayed in positive territory, but gains only gathered pace in later part of trading day with investors covering 

short positions as spot May supplies tight. 

The much awaited south-west monsoon on Monday (May 17) brought first showers to the Andaman and Nicobar islands, setting the stage for its early progression towards Kerala, According to the Director General of the India Meteorological Department India, South-west monsoon has set in over parts of south Bay of Bengal, Andaman and Nicobar Islands and most parts of Andaman Sea.

A depression in the Bay of Bengal was expected to pull the monsoonal flow towards the mainland and it may reach Kerala earlier than May 30. Malaysia’s natural rubber production increased 48.4% year-on-year in March, the Department of Statistics said on May 14. On a monthly basis, however, production decreased 13.2%. The smallholdings sector contributed 95% of the total production, while the rest came from the estate sector. In March, natural rubber exports surged 88.6% annually and a strong growth of 40.9% was recorded monthly.

China topped the list of main buyers of Malaysian rubber with a share of 34.9% in the total exported rubber. Reliance Industries Ltd proposes to set up a joint venture with Russian petrochemical firm SIBUR to make synthetic rubber in India.

In a media release issued jointly on Sunday, the companies said the proposed joint venture make butyl rubber at RIL's petrochemical facility at Jamnagar, Gujarat.

(commodityonline.com)

Rubber Board to hold meetings for rubber growers

KOTTAYAM (Commodity Online): The Rubber Board will hold an intensive mass contact programme so as to bring awareness among the rubber growers about the need of improving the quality of sheet rubber and to impart training in scientific sheet rubber processing. 

In a statement issued on Thursday, 20 May 2010 the board informed that the meetings are scheduled to be held from 1 June to 16 July 2010. Four thousand meetings with a participation of one lakh growers will be arranged in the traditional rubber growing belt of Kerala, Tamil Nadu and Karnataka with the active involvement of the Rubber Producers’ Societies. 

“The tyre industry- especially the truck/bus tyre sector- consumes the major portion of the natural rubber. The tyre sector is now switching over to production of radial tyres, which have relatively superior quality and better life than the cross ply (bias) tyres. Sheet rubber of the quality RSS 4 and above is essential for the production of radial tyres. This will make it difficult for the growers to fetch good price for low quality sheets in future. The growers should therefore be prepared to improve the quality of their sheet rubber,” the Board maintained in a statement. 

In addition to the main theme of quality improvement of sheet rubber, topics like tappers bank, low frequency tapping, controlled upward tapping, mechanisation in rubber cultivation, necessity of replanting, mosquito control in rubber estates etc will also be discussed in the campaign meetings.

(commodityonline.com)

Spot rubber shows mixed trend

On Wednesday (19 May 2010), the physical rubber prices showed a mixed trend. Sheet rubber ended unchanged at Rs 160 per kg on buyer resistance possibly since the domestic futures were in a corrective phase during the session.

The June futures for RSS 4 declined to Rs 161.20 (163.42), July to Rs 160.90 (163.37), August to Rs 154.70 (158.14) and September to Rs 151.24 (153.76) a kg on National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 160 (160); RSS-5: 156 (155); ungraded: 154 (152); ISNR 20: 139 (138) and latex 60 per cent: 98.50 (97).

(indiainfoline.com)

Rubber Advances as Thai Political Turmoil Raises Supply Concern

By Aya Takada and Supunnabul Suwannakij

May 19 (Bloomberg) -- Rubber gained for a second day, reversing earlier losses, as escalating violence in Thailand’s capital stoked speculation that supply from the world’s largest exporter may be disrupted.

Futures in Tokyo advanced after declining by as much as 2.1 percent on lower oil prices. Oil fell as the euro slumped to the lowest level in four years after Germany banned some speculative sales, triggering concern Europe’s debt crisis will worsen.

Gunfire and explosions rocked central Bangkok today as troops backed by armored vehicles surrounded a camp occupied by several thousand demonstrators seeking to oust Prime Minister Abhisit Vejjajiva. Still, most of Thailand’s rubber estates are in the south, hundreds of kilometers from the disturbances.

“Escalating violence in Thailand raised speculation supply may be affected,” Kazuhiko Saito, an analyst at commodity broker Fujitomi Co. in Tokyo, said by phone.

Rubber for October delivery, the most-active contract, gained 2.2 percent to settle at 267.7 yen per kilogram ($2,916 a metric ton) on the Tokyo Commodity Exchange.

The price earlier declined to as low as 256.6 yen as a drop in oil and stocks spurred investors to cut their holdings of risk assets, Saito said.

Germany’s Ban

Germany prohibited naked short-selling and speculating on European government bonds with credit-default swaps, sparking anxiety among investors about increasing regulation. The ban, which lasts until 2011, also applies to the shares of 10 banks and insurers, German financial regulator BaFin said.

Crude oil for June delivery fell 1.2 percent to $68.60 a barrel on the New York Mercantile Exchange at 1:17 p.m. in Tokyo. Earlier, the price slumped to a seven-month low as a stronger dollar weakened the appeal of the commodity.

“Investors are afraid that Germany’s ban on naked trading will reduce people’s appetite for risk,” said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc.

Rubber futures have retreated after touching a 21-month high of 338.5 yen per kilogram April 16 on a seasonal drop in supply from Thailand.

“Ongoing political unrest doesn’t disrupt rubber exports,” Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co., said today by phone from Bangkok.

September-delivery rubber on the Shanghai Futures Exchange added 1.2 percent to settle at 21,730 yuan ($3,183) a ton.

(businessweek.com)

Oil, Copper, Zinc Tumble as Commodities Slide on Euro Concern

By James Poole

May 19 (Bloomberg) -- Crude oil, copper, zinc and rubber dropped on concern Europe’s debt crisis will worsen, derailing economic growth and hurting demand for commodities.

Oil for June delivery slumped as much as 2 percent to $68.05 a barrel before trading at $68.14 at 8:46 a.m. Singapore time. Copper for three-month delivery declined 2.8 percent to $6,505 per ton, zinc slid 3.5 percent to $1,871 per ton and rubber fell 1.6 percent to 257.80 yen per kilogram.

(bloomberg.com)

Rise in spot rubber prices

On Tuesday (18 May 2010), the spot rubber prices rose due to speculative interests. Another bull run in the domestic and international markets mainly TOCOM catalysed the day's mood. Sheet rubber increased sharply to Rs 160 (Rs 155) per kg amidst scattered transactions.

The June futures for RSS 4 rose to Rs 163.30 (157.90), July to Rs 163.11 (157.72) and August to Rs 158 (154.34) a kg on National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 155 (154); RSS-5: 151 (150); ungraded: 148 (147.50); ISNR 20: 136 (137) and latex 60 per cent: 96 (97).

(indiainfoline.com)

Synthetic rubber output up 27% in Feb

The production of synthetic rubber went up by 24.2% to 8,768 tonne in February against 7,055 tonne in the year-ago period, according to the latest Rubber Board data. Consumption grew by about 30% to 31,440 tonne in February 2010 over 24,210 tonne in the same month last year, on the back of high demand from auto tyre manufacturers.

Rice exports to B’desh

India has allowed exports of 100,000 tonnes of non-basmati rice to neighbouring Bangladesh, a government statement said on Tuesday, partially lifting a two-year year old ban. State-run trading firms State Trading Corp of India, MMTC Ltd, and PEC Ltd would supply the grain to Bangladesh, the Directorate General of Foreign Trade, an arm of the trade ministry, said on its website.

(financialexpress.com)

Asia Rubber-Tight supply delays Thai shipment; SIR20 traded

* Some Thai shipments delayed, traders shrug off violence

* SIR20, SMR20 done at $2.70 to $2.80/kg

* China chases nearby shipments

By Lewa Pardomuan

SINGAPORE, May 18 (Reuters) - Tight supply has caused the delay of several shipments of Thai rubber but the deadly violence in the capital Bangkok has had little impact on physical trading, dealers said on Tuesday.

China and major tyre makers such as Bridgestone Corp (5108.T) are in the market for nearby shipments, and a few deals for Indonesia's SIR20 and Malaysia's SMR20 were struck late on Monday at less than $3 a kg, they said.

But some consumers turned their backs on Thai RSS3 grade because of the high prices and a price gap between June and July cargoes. Heavy rains have disrupted tapping in main producer Thailand, leading to tight supplies.

"It's very difficult to trade now. Bridgestone is looking to buy RSS3 at $3.15 while sellers are quoting it at $3.40 for July shipment. The price gap is too big," said a dealer in Thailand'+s southern city of Hat Yai.

"There are some delays in shipments for May/June shipment mostly to major consumers such as Bridgestone and Michelin, but it has something to do with tight supply. There are no problems in the port of Bangkok. The protesters don't go into the port." Thai anti-government protesters agreed on Tuesday to talks brokered by a Senate leader to end Thailand's deadliest political crisis in 18 years, but analysts doubted the negotiations would halt the spiralling violence. [ID:nSGE64H027] Although the physical market was normal in Thailand, difficulties in getting raw material had caused a slowdown in activity. Consumers desperate for June shipment will have to pay as high as $3.60 a kg -- 20 cents higher than for July cargo.

Physical rubber struck a record high of $4.10 a kg in mid-April. For details on physical prices, click on [ID:nSGE64H02D]

In second largest producer Indonesia, SIR20 changed hands at $1.22 per pound for July delivery and at $1.23 to $1.24 per pound for June, indicating tightness in supply for prompt shipment.

"There are not many sellers around but we heard about several deals last night. China is around but they are not so aggressive," said a dealer in Indonesia's main growing island of Sumatra, referring to the world's largest consumer.

China's rubber stocks have seen a steady decline since February as consumers turned to domestic warehouses for supplies but there were signs they were stocking up again.

Deliverable rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 16.6 percent from one week earlier, the exchange said on May 14

"China has been buying quite substantially in the past few days, but maybe because we are selling cheaply," said a physical dealer in Singapore. "We sold SMR20 at $2.80, while others offer the grade at $2.90." (Additional reporting by Apornrath Phoonphongphiphat in BANGKOK; Editing by Ed Lane)

(reuters.com)

Dealers set to raise tyre prices

BRUNEI - Tyre dealers are poised to raise prices in the coming months, with some vendors saying the adjustment could be as much as 10 per cent amid a sharp rise in the global prices of rubber.

"Tyre prices will be increased accordingly with the increase in price for rubber and other raw materials used in producing tyres," said Jasmain Tay, general manager of Hock Motor Company, distributor of Goodyear, Dunlop, Silverstone and Yokohama branded tyres.

He said that Hock Motor was still studying the move, hence any adjustments should not come into effect until July.

A representative from Sin Hup Huat Co, authorised distributor of Michelin tyres in Brunei, also said the firm would be raising prices, but did not comment further.

Guan Ho Hin, a dealer of branded tyres, would also hike prices sometime next month, an employee said. "The price will go up, maybe about 10 per cent, but exactly how much, it's difficult to actually say. It depends on the size and the pattern of the tyre."

Two weeks ago, French tyre maker Michelin announced it would be increasing prices to offset higher costs of raw materials rubber.

"Tight supplies in major producing countries like Thailand and Malaysia, and a spike in demand (worldwide)," are contributing factors for the volatility of rubber prices, according to wire agency Reuters.

World rubber prices were volatile for much of this year after surging in 2009 due to supply shortages.

In a press statement, Jean-Dominique Senard, one of Michelin's three managing partners, called the "violent increase" in rubber prices a "real issue" for 2010, saying that Michelin was going to ensure that sale prices reflect the rise in costs they are experiencing.

Prices could balance out again in 2013-14, he noted.

Michelin said it had suffered a 10 per cent drop in sales for 2009, during the global economic downturn when the tyre maker released its full-year results, citing rising rubber prices and an unclear market outlook as reasons for being "extremely vigilant".

Italian rival Pirelli & C SpA had also said it was considering raising tyre prices to offset raw material costs, including the cost of natural rubber.

Tay of Guan Hock Motor said freight prices were also a factor in the cost competitiveness of tyre products as they were directly shipped to Brunei from Europe. "If freight prices go down then of course it's going to be good."

He added that while it was something that needed to be addressed, high freight prices are generally similar to raw material prices, whereby the buyer does not have any control over it.

"Any increase in costing, for example (rubber or freight), will naturally increase overall prices for consumers," he said.

(motoring.asiaone.com)

Rubber Climbs for First Day in Three as Oil Rally Boosts Appeal

By Supunnabul Suwannakij and Aya Takada

May 18 (Bloomberg) -- Rubber advanced for the first time in three days as rising crude oil prices improved the appeal of the raw material used to make tires.

Futures gained as much as 4.1 percent after falling 3.6 percent yesterday to the lowest close in five months. The price reached a 21-month high of 338.5 yen per kilogram ($3,656 a metric ton) April 16 on a seasonal decrease in supply from Thailand, the largest exporter.

Crude oil advanced for the first time in six days as some investors took the view a drop below $70 a barrel made the commodity attractive to buy. Natural rubber typically tracks oil prices as a gain in crude boosts the cost of synthetic rubber made from petroleum.

“Oil staying above $70 a barrel provides positive sentiment to the rubber market,” Chaiwat Muenmee, an analyst at broker DS Futures Co., said by phone from Bangkok.

Rubber for October delivery, the most-active contract, gained as much as 10.3 yen to 263.1 yen before settling at 262 yen on the Tokyo Commodity Exchange.

Crude oil for June delivery climbed as much as 1.5 percent to $71.12 a barrel on the New York Mercantile Exchange before trading at $70.99 at 4:07 p.m. in Tokyo. Yesterday, the contract fell to $70.08 a barrel, the lowest settlement since Dec. 14.

The cash market in Thailand, world’s largest producer, remains closed for a second day as political turmoil escalates. At least 38 people have been killed since May 13 and more than 200 injured after protesters occupied parts of downtown Bangkok.

“The political turmoil is unlikely to affect the Tocom market as rubber exports haven’t been disrupted,” said Chaiwat.

September-delivery rubber on the Shanghai Futures Exchange added 3.6 percent to 21,825 yuan ($3,197) a ton.