Rubber in Shanghai, Singapore and Thailand climbed to records amid concern that rain and flooding may limit supply from major producers in Asia. Futures in Tokyo retreated from a 30-year high.
May-delivery rubber on the Shanghai Futures Exchange jumped as much as 5.8 percent to an all-time-high of 37,070 yuan ($5,558) a metric ton before closing at 35,865 yuan. December- delivery rubber on the Singapore Commodity Exchange advanced as much as 2.8 percent to $4.34 a kilogram.
“Increasing worries over damage to rubber production from floods and landslides in Thailand drove prices to new highs,” Varut Rungkhum, analyst at commodity broker Agro Wealth Ltd., said by phone from Bangkok.
June-delivery rubber on the Agricultural Futures Exchange of Thailand gained as much as 0.4 percent to 131.50 baht ($4.40) a kilogram, the highest level for the most-active contract since the bourse was established in 2004.
The cash price in Thailand added 0.2 percent to 125 baht per kilogram today, according to the Rubber Research Institute of Thailand. The rubber trading center in Songkhla was closed during Nov. 2-4 due to floods.
Exporters in Thailand, the largest producer, raised prices of so-called RSS-3 grade rubber to foreign buyers by 7 percent in the past week, according to Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co.
“Rubber continued a bull run because of concern about supplies,” Saito said by phone today. “News about a volcano eruption in Indonesia also raised speculation that supply from the country, already limited by rain, may tighten further.”
Thailand, Indonesia
Heavy rain in Thailand, Indonesia, Malaysia, Vietnam and India has damaged rubber plantations, causing a supply shortage amid strong demand and supporting prices, the Rubber Research Institute of Thailand said on its website today.
About 6.3 million rai (1.9 million acres) of agricultural land, or 4.8 percent of total arable land, was damaged from floods that spread across 51 provinces in Thailand, according to the Department of Disaster Prevention and Mitigation.
Mount Merapi in Indonesia, the second-largest rubber exporter, has been spewing ash for two weeks. About 280,000 people sought shelter at evacuation centers outside the 20- kilometer (12 mile) safety zone after the latest big eruption on Nov. 5, according to the National Disaster Management Agency.
The volcano may release ash for as long as two months, Subandriyo, an official at the Volcanology and Geology Disaster Mitigation Center, said Nov. 3.
April-delivery rubber on the Tokyo Commodity Exchange lost as much as 1.8 percent to 355.3 yen per kilogram ($4,372 a ton) before settling at 359.2 yen. It jumped as much as 5.7 percent to 364.8 yen on Nov. 5, the highest level for the most-active contract since February 1980.
Futures in Tokyo declined as the dollar advanced against the euro, raising speculation that a stronger U.S. currency may weaken investor demand for commodities as an alternative asset, Saito at Fujitomi said.
(bloomberg.com)
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