Feb. 24 (Bloomberg) — Natural rubber futures declined as a sell-off in global equity markets deepened concern that a worsening economic slump will weaken demand for the commodity used in tires.

Prices in Tokyo lost as much as 3.5 percent. Asian equities slid, dragging the regional benchmark to the lowest in more than five years. The MSCI Asia Pacific Index is set for its lowest close since August 2003. The widening global recession has slashed sales and output of vehicles.

“A slump in global equities spurred investors to cut holdings of risk assets,” Jun Nishimuta, an analyst at Kanetsu Asset Management Co. in Tokyo, said today by phone.

Rubber for July delivery fell 2.9 percent to close at 132 yen a kilogram ($1,386 a metric ton) on the Tokyo Commodity Exchange. Rubber for August delivery, listed on the exchange today, ended at 134 yen.

Rubber futures also declined as falling crude oil pared the cost of making rival synthetic product, Nishimuta said.

Oil fell as much as 2.1 percent, losing for a third day on speculation that U.S. stockpiles will rise for the 19th week in the past 22 as the economic slowdown crimps fuel demand.

Toyota Motor Corp., Honda Motor Co. and other Japanese carmakers may post at least a combined 20 percent drop in February local sales as the economic recession damps demand, the Japan Automobile Dealers Association said today.

“February’s numbers are looking very bad,” Chairman Yoichi Amano told reporters in Tokyo. Sales in March are “certain” to show a comparable decline, he said.

Japan’s vehicle sales, excluding minicars, fell 28 percent last month, the biggest monthly drop since May 1974. Japan is headed for its worst postwar recession as factory output slumped an unprecedented 9.6 percent in December and unemployment surged.

May-delivery rubber on the Shanghai Futures Exchange, the most-active contract, lost 4 percent to close at 12,590 yuan ($1,841) a ton.

Source: Bloomberg

Tocom rubber futures settle mostly lower in very thin volume, despite weakness in yen vs dollar, as crude oil weakness, sluggish physical demand continues to drag on sentiment, says trader. Adds, further downside likely in coming sessions, though Tocom should find strong technical support at Y128/kg, pending fresh bearish news. Benchmark August RSS3 contract settles unchanged from this morning”s opening at Y134/kg. (ANJ)

Source: Dow Jones

Feb. 23 (Bloomberg) — Natural rubber futures climbed for a second day after crude oil advanced, increasing the cost of making the rival synthetic product used for tires and tubes.

Futures in Tokyo reversed earlier declines as oil rose as much as 1.9 percent and Asian stocks gained on speculation the U.S. government will raise its stake in Citigroup Inc. to ease the financial crisis and revive economic growth. The Japanese currency fell, making yen-based contracts more attractive to investors.

“Crude oil’s gain helped rubber recover from early losses,” Jun Nishimuta, an analyst at Kanetsu Asset Management Co. in Tokyo, said today by phone. The yen’s weakness against the dollar also pushed Tokyo rubber futures higher in late trading, he said.

Rubber for July delivery closed up 1.3 percent at 135.9 yen a kilogram ($1,440 a metric ton) on the Tokyo Commodity Exchange. The contract earlier fell to 131.1 yen after dropping 6.6 percent last week. The spot February contract expired at 123.6 yen today, compared with the January contract expiry last month at 125 yen.

Crude oil for April delivery rose 1.4 percent to $40.57 a barrel after reaching $40.80 in New York electronic trading. Synthetic rubber is made from naphtha, distilled from petroleum.

The MSCI Asia Pacific Index gained as much as 1.3 percent to 77.02. The Japanese currency declined by as much as 0.9 percent against the dollar.

May-delivery rubber on the Shanghai Futures Exchange, the most-active contract, jumped 2.3 percent to close at 13,110 yuan ($1,917) a ton.

Source: Bloomberg

TOKYO, Feb 23 (Reuters) – Japan’s crude rubber inventories
totalled 10,304 tonnes as of Feb. 10, up 2.4 percent from Jan.
31, data from the Rubber Trade Association of Japan showed on
Monday.
The figure was down 5.2 percent from a year earlier, but up
significantly from an all-time low of 4,004 tonnes marked
on Oct. 10, according to the data, which is released every 10
days.
The rise in stocks is partly a reflection of weak demand for
rubber, mostly used in tyres, as top automakers slash production.
Following are details of the association’s latest data:
Feb 10 Jan 31 Jan 20 Jan 10 Dec 31
Crude rubber 10,304 10,067 9,931 9,206 9,066
Natural Latex 464 399 368 329 363
Synthetic
(solid) 2,488 2,301 2,525 2,641 2,766
Synthetic Latices
(D.R.C.) 23 23 23 23 23

Source: Reuters

Tocom rubber futures settle mostly higher on technical rebound following yesterday”s drop, while weaker yen vs dollar lends further support, says trader. Adds market likely to consolidate in Y130-Y145 range in coming sessions amid a general lack of firm direction, though focus to stay firmly on sluggish global consumption outlook, while breach of Y130/kg support would trigger another round of cut-loss selling, pave way for further steep decline. Benchmark Jul RSS3 contract settles Y2.2 higher at Y134.2/kg. (ANJ)

Source: Dow Jones