Rubber Surges to Record on Supply Concern, Nears 500 Yen/Kg

Rubber jumped by the most in three months, rising to a record as crude oil’s rally boosted the appeal of the commodity and rain in Asian growing regions curbed output, raising concern that supply tightness may worsen.

The July-delivery contract gained as much as 3.8 percent before settling at 489.9 yen on the Tokyo Commodity Exchange. In after-hours trading, the most-active contract surged to an all- time high of 499.9 yen a kilogram ($6,120 a metric ton). Transactions in this session will be settled tomorrow.

Oil climbed for a second day as protests in Egypt turned violent, prompting concern that supplies may be disrupted and unrest may spread to other parts of the Middle East. Persistent rainfall inThailand’s key plantation areas has limited supply, according to the Rubber Research Institute of Thailand.

“Tight supply of rubber and a strong auto market boosted the price to a new high,” Gu Jiong, an analyst at commodity broker Yutaka Shoji Co., said by phone from Tokyo. “Oil trading above $90 a barrel is also supportive.”

The most-active contract climbed 12 percent last month, extending last year’s 50 percent rally, as supplies from Thailand, Indonesia and Malaysia, the top three growers representing 70 percent of global supply, were curbed by rain while rising car sales led by China and Indiaimproved demand.

La Nina, which started in June and usually lasts for nine months or more, has led to higher than average rainfall in most parts of Southeast Asia. The weather event’s strength may decrease during the next four months, the Malaysian Meteorological Department said in response to questions, supporting forecasts by the World Meteorological Organization.

‘Major Impact’

The weather event is having a “major impact” on rubber and palm oil production in Malaysia, as heavier rainfall may hamper harvesting and tapping, the Malaysian Meteorological Department said yesterday.

The physical price of natural rubber in Thailand, the world’s largest supplier, advanced to 180.55 baht ($5.84) a kilogram today from 178.55 baht yesterday, the Rubber Research Institute of Thailand said. The price reached a record 181.55 baht on Jan. 25.

Bridgestone Corp., the world’s largest tiremaker, said it will raise tire prices in North America by as much as 8 percent on April 1 because of the increasing cost of raw materials.

The Shanghai market will be closed until Feb. 8 for Lunar New Year holidays. May-delivery rubber in Shanghai climbed to a record 41,850 yuan ($6,350) a ton on Jan. 31.

Natural-rubber  consumption in China may rise 9 percent to 3.6 million tons this year and India’s consumption may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries.

China’s natural-rubber inventories rose for the first week in four, adding 126 tons to 58,673 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, theShanghai Futures Exchange said on Feb. 1. That was a 61 percent decline from last year’s peak of 151,832 tons.

Car sales growth in China will be around 10 to 15 percent this year, the China Association of Automobile Manufacturers said Jan. 10. Total auto sales, which include cars, trucks and buses, jumped 32 percent last year to 18.06 million, the association said.

(Source: http://www.bloomberg.com/news/2011-02-03/rubber-surges-to-record-on-supply-concern-nears-500-yen-kg.html)

Tokyo futures hit record high at 490.2 yen/kg

BANGKOK, Feb 3 - Tokyo rubber futures hit another record high on Thursday on the back of firm oil prices, tight supply and a pause in the yen's rise, dealers said.

* The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for July delivery rose 17.7 yen, or 3.7 percent, to settle at 489.9 yen per kg. It rose as high as 490.2 yen, the highest ever.

* "The TOCOM price should rise further after Chinese businessmen get back to work after the Chinese New Year holiday as demand from China should remain strong," one dealers said. China is the world's biggest rubber consumer.

* U.S. crude rose for a second day on Thursday after violent clashes in Egypt raised the prospect of further unrest across the Middle East. [O/R]

* The yen took a breather in line with the euro, which paused below a 12-week peak on Thursday. At 0651 GMT, the yen was at 81.64 per dollar. [USD/]

* The Shanghai Futures Exchange will be closed until Feb. 8 for the New Year holidays. Its most active rubber contract for May delivery <SNRK1> closed at 41,710 yuan per tonne on Tuesday after rising as high as 41,790 yuan, just shy of a record 41,850 yuan hit on Monday.

* TOCOM rubber futures were forecast to stay near record high levels over the next two months, according to a Reuters poll. [ID:nSGE71100G]

* Physical rubber prices were also offered at record high levels on Thursday, with Thai RSS3 quoted at $5.90 per kg.

(Source: http://ph.news.yahoo.com/rtrs/20110203/tap-markets-asia-rubber-c3bb44c.html)

Yokohama Rubber to increases tire production capacity in Philippines

Thursday, February 3, 2011

Tokyo - Yokohama Rubber announced that it would increase production capacity of Yokohama Tire Philippines (YTPI), a local passenger car tire manufacturing and sales company, to 10 million tires a year from current 7 million as the first-phase expansion. Yokohama Rubber starts constructing a new tire plant at the adjacent area after signing its tenancy agreement this month.

The company plans to operate the area’s first expanded portion in 2013 and makes the area fully operable in 2014. The amount of investment in the first-phase expansion is 20 billion yen. Also planned is to increase YTPI’s annual production capacity to 17 million tires by 2017 after making an investment to increase the capacity to 13 million by 2014 as the second-phase expansion, making the total amount of investment approximately 50 billion yen.

(Source: http://www.rubberworld.com/news.asp#16115)

Sales and earnings up at Yokohama Rubber in first nine months

Thursday, February 3, 2011

Tokyo - Yokohama Rubber announced that its sales and earnings increased in the first three quarters of the present fiscal year, the nine months ended December 31, 2010. Net sales increased 13.5% over the same period of the previous fiscal year, to 390.4 billion yen; operating income increased 52.2%, to 26.3 billion yen; and net income increased 25.2%, to 11.3 billion yen. Yokohama posted sales gains in tires and in high-pressure hoses, sealants, and other diversified products. The sales growth more than compensated for the adverse effect on earnings of rising prices for raw materials and the appreciation of the yen. Also contributing to improved profitability were a rise in capacity utilization rates and progress in trimming costs.

In Yokohama’s tire operations, sales increased 13.7%, to 310.2 billion yen, and operating income rose 37.4%, to 23.2 billion yen. Sales in Yokohama’s industrial products operations increased 18.2%, to 62.4 billion, and operating income rose 36.1-fold, to 2.1 billion yen. Business in those operations centers on high-pressure hoses, sealants and adhesives, conveyor belts, anti-seismic rubber-and-steel fittings for structures, marine hoses, and marine fenders. Leading the sales growth were strong gains in high-pressure hoses for construction equipment and in automotive window sealants.

(Source: http://www.rubberworld.com/news.asp#16112)

Bridgestone Bandag increasing prices 12%

Muscatine, Iowa (February 1, 2011) - Bridgestone Bandag Tire Solutions (BBTS), a division of Bridgestone Americas Tire Operations, today announced a 12% price increase on its Bridgestone and Firestone brand truck and bus radial tires, effective immediately.

“Unfortunately, severely escalating raw material costs, as well as energy and other costs related to manufacturing, have made a price increase of this level unavoidable,” said Kurt Danielson, president, BBTS. “We remain committed always to provide a premium package of quality and value to our customers.”

(Source: http://www.rubberworld.com/news.asp#16112)

Colombo rubber prices down on Chinese Lunar Holidays

The Colombo Rubber Auction experienced a drop in prices for all grades of rubber as the exporters slowed down their purchases in lieu of the Chinese Lunar New Year holidays.

Latex Crepe 1X settled at Rs. 600 while Latex Crepe 1 traded between Rs.590 to   Rs.600.

China, the largest buyer of natural rubber in the world will be closed for their annual lunar festival during next 10 days. People with Chinese origin living in most South East Asian countries are expected to close businesses for this annual event.

Prices in Tokyo and Singapore firmed up as the crude oil prices rose, whilst heavy floods were reported in rubber  growing areas of Malaysia hampering tapping operations.

"The market lacks direction because investors are both covering shorts and liquidating longs ahead of the Lunar New Year," said a Singapore-based trader.

Physical supply was better than last month and Tocom futures will likely trade mostly in a Y455-Y475/kg range this week, as per the brokers in Tokyo.

"The overall sentiment is bullish as investors are expecting strong physical demand from China after the Lunar New Year holidays," a Bangkok-based analyst said.

With the on set of wintering season, and the unexpected showers, rubber production is likely to decline in Sri Lanka in the coming weeks.

(Source: http://print.dailymirror.lk/business/127-local/34696.html)

Lower local prices boost rubber exports

KOCHI: Export prospects have opened up for natural rubber with domestic prices ruling substantially lower than the international prices. Though shipments started picking up only by November 2010, total exports are likely to catch up with the last financial year’s level.
At a time when the rubber-based industry is busy trying to contract imports, rubber producers in the market are flooded with export orders. “We are getting good export enquiries,” said KK Abraham, president of the Palai Marketing Cooperative Society. The Society is likely to end the year with an export of 5,000 tonne.
Domestic rubber  prices are ruling at around Rs 223.50 per kg against international prices which are Rs 265.21 per kg. “The difference of around Rs 40 per kg has resulted in higher exports in the past few months,” said Biju John, CPM Spices Corporation .
He said that exports started picking up from November when domestic prices fell below the international prices. Exports stood at 11,678 tonne during the April-January period against 12,912 tonne during the same period of the previous year. Rubber Board officials said exports would be more or less same as the last year’s 25,090 tonne.
Speaking to ET, Abraham pointed out that rubber producers prefer to sell in the local market as payments are realised faster.
Meanwhile, 31 players have applied to DGFT make use of the special scheme to import 40,000 tonne before March 31 at 7.5% duty. “The industry is going in for imports at a higher price when it can buy rubber here at prices that are lesser by almost Rs 40 per kg,” Biju John said.
The Palai-based Kavanar Latex has exported 8 containers of Indian standard natural rubber. Vijayakumar, the managing director of the company, said orders were pending for another 6 containers. The company will be exporting 500 tonne this year.
The shortage of rubber in the international market has increased the demand for the Indian variety.

(Source: http://economictimes.indiatimes.com/markets/commodities/lower-local-prices-boost-rubber-exports/articleshow/7415283.cms)