Feb. 19 (Bloomberg) — Natural rubber futures dropped for a third day to the lowest in almost two months after Bridgestone Corp., the world’s largest tiremaker by sales, forecast a 71 percent profit drop this year.

Futures in Tokyo lost as much as 4.3 percent to the lowest since Dec. 26. Tokyo-based Bridgestone said in a statement today. Net income will likely fall to 3 billion yen ($32 million) from 10.4 billion yen last year as tire sales are expected to drop in Japan, North America and Europe.

“Rubber demand won’t recover anytime soon,” Shuji Sugata, research manager at Mitsubishi Corp. Futures & Securities Ltd., said by phone. “The slump in demand for materials used in cars may continue throughout this year.”

Rubber for July delivery, the most-active contract, lost 3.2 percent to settle at 132.0 yen a kilogram ($1,412 a metric ton) on the Tokyo Commodity Exchange.

Futures have lost 3 percent this year on concern a deepening slump in global economies will weaken demand for the commodity used to make vehicle tires. Bridgestone may scale back or postpone plans to build a factory in Poland and increase production in Thailand and Indonesia, the Nikkei newspaper reported today.

Toyota Motor Corp., the world’s biggest carmaker, will slash domestic production 54 percent in the current quarter as demand plunges in the U.S. and Japan. The company’s output, excluding its Daihatsu Motor Co. and Hino Motors Ltd. units, will drop to about 519,000 vehicles in the three months ending in March, compared with 1.13 million units a year ago, according to figures derived from Toyota’s latest full-year forecast.

Currency Limits Losses

Losses in rubber futures were limited after the Japanese currency tumbled to the lowest in six weeks against the dollar yesterday, raising the appeal of yen-denominated contracts.

The dollar advanced after U.S. President Barack Obama released a $275 billion housing program to stem foreclosures. The dollar traded at 93.55 yen by 6:22 p.m. in Tokyo.

May-delivery rubber on the Shanghai Futures Exchange, the most-active contract, lost 4.9 percent to 12,695 yuan ($1,857) a ton.

Source: Bloomberg

Tocom rubber futures settle lower as sentiment again turns weaker as fresh bearish news from auto manufacturing, tire manufacturing sectors exacerbate concerns about demand, while SHFE drops sharply following report China”s SRB now plans to buy 55,000 tons from SHFE and state-owned farms in Hainan province, down from indications of 80,000 tons in previous reports; focus on Tocom now turns to how market reacts around Y130/kg psychological support tomorrow, with breach of that level likely to spark another round of cut-loss selling, says trader in Tokyo. Benchmark July RSS3 contract settles Y4.3 lower at Y132/kg. (ANJ)

Source: Dow Jones

Feb. 18 (Bloomberg) — Natural rubber futures tumbled to a two-week low on concern a worsening slump in global economies will slash demand for the commodity used to make vehicle tires.

Prices in Tokyo fell 4.8 percent to the lowest since Feb. 3 after manufacturing in New York declined in February at the fastest pace on record. The Reuters/Jefferies CRB Index of 19 prices dropped yesterday for a sixth day, the longest slump since December, and reached the lowest since June 21, 2002.

“Industrial commodities came under pressure as data this week showed a recession worsened in Japan and the U.S.,” Kazuhiko Saito, an analyst at Tokyo-based commodity broker Fujitomi Co., said today by phone.

Rubber for July delivery, the most-active contract, closed down 6.9 yen at the session low of 136.3 yen a kilogram ($1,475 a metric ton) on the Tokyo Commodity Exchange.

Former Federal Reserve Chairman Alan Greenspan said the U.S. may be doing too little to repair its financial system and promote an economic recovery.

The comments highlight the difficulties President Barack Obama faces in fighting the steepest recession in a generation. The economy contracted at an annual pace of 3.8 percent in the fourth quarter of last year, the most since 1982. Greenspan spoke in an interview before a speech prepared for yesterday to the Economic Club of New York.

Japan’s economy shrank in the fourth quarter at an annualized rate of 12.7 percent, the most severe contraction since 1974, government data showed Feb. 16.

Production Cuts

Rubber futures also declined on concern carmakers may accelerate production cuts as consumption drops, Saito said.

General Motors Corp., the largest U.S. carmaker, said yesterday it needs as much as $16.6 billion in new U.S. loans, more than doubling the aid to date, and must get some of the cash next month to survive. GM plans 47,000 more job cuts worldwide this year and is closing five more U.S. plants by 2012.

Chrysler LLC said it’s seeking $5 billion more from the government and will shed 3,000 more positions. The automakers met a deadline to report progress in revamping operations with $17.4 billion in loans granted so far, and now they must show the U.S. by March 31 that they can become profitable and be allowed to keep the money.

“Uncertainty about whether the U.S. carmakers can survive is another drag on prices of rubber,” Saito said.

May-delivery rubber on the Shanghai Futures Exchange, the most-active contract, lost 3.9 percent to 13,345 yuan ($1,951) a ton.

Source: Bloomberg

TOKYO, Feb 17 (Reuters) – Key Tokyo rubber futures closed
down a touch on Tuesday, caught in a narrow range as traders took
their cue from sluggish oil, which has fallen this week on
concerns about poor demand due to the global economic crisis.
* The key Tokyo Commodity Exchange rubber contract for July
delivery <0#JRU:> closed at 143.2 yen per kg, down 0.4 yen, after
moving between 142.1 yen and 145.7 yen.
* Oil prices remained below $37 a barrel as the market
was dragged down by worries about declining global oil demand.
[O/R]
* The dollar rose 0.7 percent against the yen, supported by
risk aversion due to recession worries. [USD/]
* “Investors and traders lack incentives to push the market
higher, even when they feel the floor is solid,” said a trader at
a Japanese commodity brokerage.
* “Investor appetite has been chilled, given the further
deterioration in the global economy. Sluggish oil prices reflect
concerns about demand while gold’s strong performance indicates
deepening worries about the economy and financial turmoil,” he
said.
* Prices may be supported by expectations that stimulus
measures announced by governments around the world will
eventually produce positive effects, but given a time lag
investors will be wary of chasing up prices, traders said.
* Traders expect the key rubber futures contract to trade
between 140 and 150 yen for a while.
* A meeting of the world’s top rubber-producing countries
planned for February in Kuala Lumpur to look at ways of
supporting prices has been put back to March, a senior industry
official said on Tuesday. [ID:nBKK222950]
* Asian physical rubber prices eased on Tuesday, pulled lower
by the sluggish futures market, but sentiment was solid due to
continued buying by China, the world’s top rubber consumer.

PRICES OF ASIAN PHYSICAL RUBBER COMPARED WITH MONDAY
Grade Price Change
Thai RSS3 (Mar) $1.50/kg -$0.04
Thai RSS3 (Apr) $1.50/kg -$0.04
Thai STR20 (Mar) $1.40/kg -$0.02
Thai STR20 (Apr) $1.40/kg -$0.02
Malaysia SMR20 (Mar) $1.40/kg -$0.02
Malaysia SMR20 (Apr) $1.40/kg -$0.02
Indonesia SIR20 (Mar) $0.60/lb -$0.01
Indonesia SIR20 (Apr) $0.60/lb -$0.01
Thai USS3 47 baht/kg -4 baht
Thai 60-percent latex (drums, Mar) $1,270/tonne -$60
Thai 60-percent latex (bulk, Mar) $1,150/tonne -$50
** NOTE – The prices quoted above are offer prices collected
from traders in Thailand, Indonesia and Malaysia. They are not
official prices quoted by state-run rubber agencies in those
countries.

Source: Reuters

Tocom rubber futures settle mostly a tad lower in lackluster, rangebound trade with just 10,580 lots traded as market still in need of firm direction. Recent onset of wintering season in world”s largest, third-largest producing countries – Thailand, Malaysia – likely to help support cash market in coming weeks, though sluggish demand outlook to continue limiting upside potential, says trader. Adds, Tocom expected to continue trading in narrow Y140-Y145 range in coming sessions, pending fresh leads. Benchmark July RSS3 contract settles unchanged from Friday”s close at Y143.6/kg; all other contracts end marginally lower except spot February, which ends up Y0.2 at Y133.2/kg. (ANJ)

Source: Dow Jones