Seemingly Ceiling Free For Presently Soaring NR Prices

On 14 January 2011, TOCOM closed its RSS3 of the benchmark June 1.3% higher at JPY454.4 a kilogram. The underlying reason is that some investors caught opportunities for shortly satisfying pre–weekend profit–takings since the hiking NR prices from the last year with a hope of deep correction. However, such a correction by a short covering is not yet strong enough to bear the strong fundamentals and stockpiling preparations of a forthcoming leaf–shedding season and the coming Chinese New Year on the first week of February.

DESCRIPTION	14 JAN	17 JAN	18 JAN	CHANGE **	% CHANGE	UNIT
IRCo's DCP	537.15	539.55	539.53	2.38		0.44%	US cents/kg
TOCOM/RSS3 *
- Jan. 11	447.90	453.50	452.80	4.90		1.09%	Yen/kg
- Jun. 11	454.40	458.30	453.40	-1.00		-0.22%	Yen/kg
SHFE/RSS3 ***	38,040	38,430	38,055	15		0.04%	Yuan/ton
AFET/RSS3
- Feb. 11	167.80	167.80	167.80	0.00		0.00%	THB/kg
- Aug. 11	167.20	166.20	167.00	-0.20		-0.12%	THB/kg
RRIT ****
- RSS3	166.55	169.55	169.55	3.00		1.80%	THB/kg
- STR20	163.55	165.55	165.55	2.00		1.22%	THB/kg
SIR20 *****	537.00	538.00	536.00	-1.00		-0.19%	US cents/kg
SMR20 *****	535.00	539.00	535.00	0.00		0.00%	US cents/kg

Source: IRCo

Note: * Day session

** Change between 14 and 18 Jan.

*** The highest daily trading volume was May 2011

**** RRIT means Rubber Research Institute of Thailand

***** Offer, f.o.b., Asian physical rubber prices for Feb./Mar. delivery, Dow Jones

Meanwhile, NR prices settled lower on the Shanghai Futures Exchange (SHEF) at CHY38,040 a metric ton, taking cues from both SHFE metals and equity & currency markets since China’s Central Bank announced on last Friday to increase in the banks’ reserve requirement.

On 17 January 2011, after the market off weekend, TOCOM reopened and rebounded to settle 0.9% higher at JPY458.3 a kilogram, after hitting a fresh record high of JPY460.4 a kilogram in early trade of its trading RSS3 benchmark June. An attempt to reach the expected output of NR from major producing countries has been hindered by lingering rainfalls and forthcoming wintering weather.

Thai NR output during the wintering season, which usually happens from the end of February until May, usually shrinks as much as 60 percent from its peak levels, the Association of Natural Rubber Producing Countries (ANRPC) said in December 2010. This low–production period also concurrently occurs in northern Indonesia and Malaysia (These three nations are the world’s top three NR exporting countries)

On 18 January 2011, major NR futures markets closed mixed as shown in the table. This is because most traders were uncertain how far the NR price could go with an offset of an escalation of scarce raw material prices.

Some traders are even being cautious for now about the optimism of the world economy. Some parts of traders’ optimism are being pushed up by the emerging economies of both China’s and India’s. The others are being pulled off by the US doubtful recovery economy and some European countries’ gigantic public debt.

(Source: http://www.irco.biz/BlogMoreDetial.php?id=2722&ShowContent=news)