June 30 (Bloomberg) — Natural rubber futures advanced to the highest level in almost two weeks and were set for a second quarterly rise after oil prices gained, boosting the cost of making the synthetic substitute.

Prices in Tokyo rose as much as 3.4 percent, tracking crude, which gained to an eight-month high as the dollar declined. Synthetic rubber is made from naphtha, which is distilled from petroleum.

“Rubber is following the sentiment toward oil,” Rewat Yenchai, an analyst at Bangkok-based AGROW Enterprise Ltd., said by phone today.

The December-delivery contract, the most active, increased 3 percent to 162.2 yen a kilogram ($1,691 a metric ton) on the Tokyo Commodity Exchange at 11:40 a.m. local time. Earlier, it reached 162.9 yen, highest since June 17.

Rubber futures have gained about 5.7 percent this quarter on speculation demand may revive as the global economy recovers. Prices climbed about 13 percent in the first three months of the year after plunging 46 percent in the final quarter of 2008.

Crude oil for August has gained as much as 6.1 percent this week, buoyed by the weaker dollar and after Nigerian militants shut an oil field operated by Royal Dutch Shell Plc. Prices today climbed to more than $73 a barrel.

Rubber for November delivery on the Shanghai Futures Exchange, the most-active contract, gained 1.2 percent to 15,690 yuan ($2,296) a ton at 10:40 a.m. local time.

Japan’s Yokohama Rubber Co. may post an operating loss of about 1.5 billion yen ($15.6 million) for the quarter ending today on lower sales, the Nikkei English News reported, without saying how it obtained the information.

Source: Bloomberg

BANGKOK, June 30 (Reuters) – Thailand, Indonesia and Malaysia, which account for 70 percent of global natural rubber output, may abandon their policy of restricting exports now that rubber prices have rebounded, dealers said on Tuesday.
The International Tripartite Corporation (ITRC), which groups senior agricultural officials from the three Southeast Asian countries is meeting in Bangkok to discuss the next step after their last gathering in April. The meeting ends on Wednesday.
“I think no tough action is needed as prices have rebounded,” said a dealer in Malaysia. “On the other hand, they should ease the policy to encourage buyers and sellers to run their business comfortably.”
At $1.68 a kg, benchmark Thai RSS3 grade is more than 50 percent above the seven-year low of $1.10 per kg struck in December on the back of purchases by China, the world’s largest consumer.
Rubber prices have taken a dramatic turn since hitting a 56-year high around $3.25 a kg last July on record-high oil prices, which in theory makes the price of synthetic rubber relatively more expensive than natural rubber.
But the multi-year high peak was short-lived as a slowing global economy slashed demand for cars around the world, and in late 2008 Chinese buyers defaulted on shipments following a sharp drop in physical prices.
In December 2008, Thailand, Indonesia and Malaysia agreed to remove 915,000 tonnes of rubber from the market in 2009 to prop up prices.
They cut 270,000 tonnes in the first quarter and then proposed at their last meeting in April to cut a combined 48,000 tonnes per month from the second quarter.
Some dealers expected the ITRC to cut exports by less than it had targeted earlier, while others said the producing countries might even lift the export cuts completely in a bid to boost rubber trade and offset declines in output.
Global natural rubber output was revised down slightly to 8,925,000 tonnes in 2009, the Association of Natural Rubber Producing Countries said, while exports fell sharply in the first few months of this year. [ID:nSP419605]
“We are not expecting much to come out of it. The price has rebounded now. It’s in a better shape since the last meeting when there was an excess of supply over demand,” said a dealer in Singapore.
Whatever the decision, dealers said prices were no longer a main issue, especially since China still showed strong interest in rubber and the U.S. dollar was also declining.
“Despite the rising stocks both in absolute terms and relative to consumption, natural rubber prices may increase during 2009-2011,” said consultancy The Rubber Economist Ltd, adding that movement of U.S. dollar was the key factor.
“The change in the value of the U.S. dollar can influence both consumers and producers. In general, a weaker U.S dollar results in higher commodity prices and vice versa.”
A trader in Thailand’s Hat Yai rubber centre said: “I don’t think there will be any news that will have an impact on the market. Prices have recovered to a level where they are not an issue any more.”
China has bucked the trend in the struggling global car industry, posting year-on-year sales growth of 47 percent in May as government stimulus measures fuelled a recovery in demand.

Source: Reuters

[Dow Jones] Asian cash rubber prices higher, tracking rise in futures markets – but price increases by suppliers slow pace of buying. “Futures markets were sharply higher in morning, but have now eased,” says exporter in Singapore; adds buyers on sidelines, uncertain about price direction. Small lots have been sold at a discount, says executive at global trading company. For a daily breakdown of cash prices for all rubber grades, keyword search ASIAN PHYSICAL RUBBER PRICES to see the item.

Source: Dow Jones

[Dow Jones] Tocom RSS3 rubber futures settle lower as investors liquidate long positions to take profits following fall in crude oil prices, stronger yen; erase most gains made late last week. “Speculative long liquidation put (downward) pressure on prices again,” says trader in Japan. Nymex light, sweet crude for August delivery trading 59 cents lower at $68.57/bbl. “Many traders aren”t keen to hold on to their long positions (on Tocom) because of fears that the yen may strengthen further to Y93-Y94 against the dollar,” says Singapore-based broker. USD/JPY hovering around Y95.50. Benchmark Tocom December RSS3 contract settles Y2.1 lower at Y157.5/kg. (SAM)

Source: Dow Jones

[Dow Jones] Tocom RSS3 rubber futures settle higher on buying interest in cash market, rise in crude oil prices to levels above $70/barrel, traders say. “Large importers are looking for August shipments of rubber,” says Tokyo-based broker; adds rubber prices likely to rise above Y160/kg near-term. Nymex, light, sweet crude for August delivery trading 59 cents higher during electronic trading at $70.82/barrel. “Rubber is still undervalued, there is upside potential due to fundamentals, provided the strong yen doesn”t play spoilsport,” says Singapore-based analyst. Benchmark Tocom RSS3 December rubber futures settles Y2.1 higher at Y159.6/kg. (SAM)

Source: Dow Jones