TOKYO, Dec 25 (Reuters) – Tokyo rubber futures fell nearly 3 percent on Thursday as weak demand and falling crude oil prices continued to hurt market sentiment.
* The key Tokyo Commodity Exchange rubber contract for June delivery <0#JRU:> ended the morning session down 3.5 yen, or 2.7 percent, at 125.8 yen.
“The market had been slowly rebounding off a recent low as investors grew wary of pushing prices too low, but the upside is limited due to the deep slump in demand that has come with the global recession,” said a Tokyo-based trader.
“There is only so much suppliers can do to help support prices. As long as demand remains slack, the market will not turn around,” the trader said, adding that the key futures contract was likely to hover around 120 yen for now.
* The key Tokyo rubber futures hit a one-month high approaching 140 yen on Monday on hopes for a scheme to raise prices that Thailand was due to begin drafting this week. But wariness over the bleak outlook for the automobile industry prompted players to take profits on recent gains.
* Tokyo’s key rubber futures contract hit a six-year low below 100 yen on Dec. 5 on growing concern about demand for the commodity needed to make tyres.
* Tyres account for about 70 percent of rubber consumption.
* TOCOM rubber has fallen more than 60 percent from the year’s peak of 356.9 yen marked at the end of June, as global automakers cut output due to the deepening economic slump.
* The world’s top three rubber producers, Thailand, Indonesia and Malaysia, agreed not to sell rubber at below $1.35 per kg at a meeting earlier this month held to discuss measures to help prop up prices.
* Members of the International Rubber Consortium (IRCo), which together produce about 70 percent of all natural rubber, also agreed to cut exports by 915,000 tonnes in 2009.
* U.S. crude settled at $35.35, down $3.63 or 9.3 percent, on Wednesday as another batch of gloomy data showed the U.S. economy has fallen deeper into recession. [O/R]
* The dollar held steady against the yen, up 0.1 percent at 90.50 yen , recovering some of its losses made after dismal U.S. data on Wednesday. But the U.S. currency hovered not far from a 13-year low near 87 yen hit earlier this month. [FRX/]
* Activity was expected to be slow for the most part due to the approach of the year-end. TOCOM will close on Dec 30, when it ends trade at noon.
* Asian physical rubber prices were mostly steady, drawing support from expectations for the Thai government’s price-support scheme and for poor weather conditions in key producing countries.

PRICES OF ASIAN PHYSICAL RUBBER COMPARED WITH WEDNESDAY
Grade Price Change
Thai RSS3 (Jan) $1.40/kg unchanged
Thai RSS3 (Feb) $1.40/kg unchanged
Thai STR20 (Jan) $1.38/kg unchanged
Thai STR20 (Feb) $1.38/kg unchanged
Malaysia SMR20 (Jan) $1.35/kg unavailable
Malaysia SMR20 (Feb) $1.35/kg unavailable
Indonesia SIR20 (Jan) $0.61/lb unavailable
Indonesia SIR20 (Feb) $0.61/lb unavailable
Thai USS3 40 baht/kg unchanged
Thai 60-percent latex (drums, Jan) $1,150/tonne +$50
Thai 60-percent latex (bulk, Jan) $1,000/tonne +$20

Source:  Reuters

Comments are closed.