Market and product
Rubber prices rebounds on speculation of a slump
The June-delivery contract advanced as much as 1.1 percent to 412.2 yen per kilogram ($5,010 a metric ton) on the Tokyo Commodity Exchange and was at 411.5 yen at 1:14 p.m. local time. The price tumbled 2.4 percent yesterday, the biggest drop since Nov. 24. The most-active contract climbed to a record 419.3 yen on Dec. 27, Bloomberg reports.
Hiroyuki Kikukawa, the general manager of research at IDO Securities Co. in Tokyo said to Bloomberg that it was a rebound after Tuesday’s sharp decline and the gains may be limited as the yen strengthened against the dollar, reducing the value of the Japanese currency-based futures.
The dollar traded near a six-week low against the yen as U.S. data signaled an uneven recovery in the world’s largest economy. The yen gained as much as 0.2 percent to 82.25 per dollar before trading at 82.34 by 10:37 a.m. in Tokyo.
The rubber prices may further grow up as the leading producer Thailand enters low yielding season in the early months of 2011.
The Association of Natural Rubber Producing Countries said in its monthly bulletin that supply of natural rubber from nine producers representing 92 percent of global output is expected to fall 6.3 percent in the fourth quarter, cutting this year’s production growth to 5.7 percent, from 6.6 percent forecast in November. Output from the association’s members is estimated at 9.42 million tons this year and may climb to 9.92 million next year.
Thailand, Indonesia and Malaysia the key producers of rubber are suffering from a low production because of unlikely seasons in the region.
Latex production in Thailand is set to shrink as growers reduce tapping of rubber trees from February to April. The seasonal drop in output may worsen a supply shortage as global demand will keep rising, led by car sales in China and India, Bloomberg reports.
May-delivery rubber in Shanghai added 0.3 percent to 36,120 yuan ($5,453) a ton. The price retreated from a record 38,920 yuan on Nov. 11 amid concern that China may take steps to cool inflation and economic expansion.
Rubber price in Thailand remained at a record 149.55 baht ($4.96) per kilogram today as persistent rains in the country’s southern provinces cut short supplies.
In India, Wednesday NMCE rubber futures on January contract opened at Rs.20931 per 100 Kg. The contract is currently trading at Rs.20995, up by 0.3 per cent. Open interest is 2971 so far and volume traded as of now is 116 tonnes.
