Wednesday, February 16, 2011

Natural Rubber Prices Move Sideways

On 11 Feb., the benchmark price of the most active month for May delivery on Shanghai rubber futures settled lowered at 42,830 yuan/ton (US$6,499/ton) from the previous day due to profit-taking while Asian physical prices were steady as market fundamentals stayed unchanged. Tokyo rubber futures market was closed on 11 Feb.

The benchmark Tokyo rubber futures (Tocom) prices for Feb. and Jul. deliveries continued increasing from 10 Feb. to 14 Feb. and settled higher at 532.1 yen/kg and 519.5 yen/kg in the day session of 15 Feb. because of supply concern and a weaker yen against the greenback. On the same day, the benchmark price of the most active month for May delivery on Shanghai rubber futures closed down to 42,520 yuan/ton (US$6,452/ton) on further profit-taking.

DESCRIPTION

 

11 Feb

 

14 Feb

 

15 Feb

 

CHANGE **

 

% CHANGE

 

UNIT

IRCo's DCP

 

590.54

 

593.79

 

591.66

 

1.12

 

0.19%

 

US cents/kg

TOCOM/RSS3 *

                       

  - Feb. 11

 

-

 

527.00

 

532.10

 

-

 

-

 

Yen/kg

  - Jul. 11

 

-

 

518.70

 

519.50

 

-

 

-

 

Yen/kg

SHFE/RSS3 ***

 

42,830

 

42,800

 

42,520

 

-310

 

-0.72%

 

Yuan/ton

AFET/RSS3

                       

  - Mar. 11

 

193.10

 

194.20

 

194.20

 

1.10

 

0.57%

 

THB/kg

  - Sep. 11

 

194.30

 

196.20

 

192.65

 

-1.65

 

-0.85%

 

THB/kg

RRIT ****

                       

  - RSS3

 

193.55

 

194.55

 

196.05

 

2.50

 

1.29%

 

THB/kg

  - STR20

 

178.55

 

178.55

 

179.05

 

0.50

 

0.28%

 

THB/kg

SIR20 *****

 

576.00

 

576.00

 

-

 

-

 

-

 

US cents/kg

SMR20 *****

 

572.00

 

575.00

 

-

 

-

 

-

 

US cents/kg

Source: IRCo

Note: * Day sessions

** Change between 11 Feb. and 15 Feb. 2011

*** 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

- Closed on Public Holiday

It is notable that the benchmark price on Shanghai rubber futures has moved in the range of about 42,000 yuan/ton (US$6,373/ton) since 8 Feb., and we expect further market correction for some time resulting from continuously tightening monetary measures by the Chinese government. In addition, IRCo’s DCP retreated slightly but still stayed above 590 US cents/kg on 15 Feb.

Furthermore, Xinhua newswires reported on 15 Feb. that the Chinese government is very concerned about a lingering dry spell that continues to threaten wheat production in Shanxi province, a major wheat growing area locating in the Northern part of China. If the dry spell spreads through Southern China in the coming weeks or months, it will surely affect natural rubber production, particularly in Yunan province.

(Source: http://www.irco.biz/BlogMoreDetial.php?id=2727&ShowContent=news)

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