TOKYO, July 31 (Reuters) – Key Tokyo rubber futures jumped 6 percent to a nine-month high above 190 yen on Friday, with traders saying speculative funds were pouring money into commodities such as rubber and oil.
* Technical charts have improved after the market broke above resistance near 180 yen late last week, and traders said momentum was building for a rise above 200 yen, a level last touched in early November.
* The key Tokyo Commodity Exchange rubber contract for January 2010 delivery <0#JRU:> settled up 11.1 yen or 6 percent at 195.8 yen per kg. Futures gained 8.8 percent on the week, the biggest weekly gain in about 7 months. The benchmark has risen about 21 percent in July.
* The key contract rose as high as 196.5 yen, the highest for a benchmark contract since Nov. 5, the last time a benchmark rose above 200 yen.
* A 10 yen rise from Thursday’s settlement in early trade triggered a circuit breaker which enables participants to trade beyond the trigger level after a five-minute halt in trading.
* “Technicals improved sharply as rubber prices broke above 190 yen along with a jump in oil prices, and if oil prices stay as firm as they have been, players are likely to want to test the next psychologically key level of 200 yen,” said Hitoshi Inagawa, senior manager at Yutaka Shoji Co.
* “Encouraged by favourable technical charts, speculative funds are buying and appear to be pushing prices higher. But other investors are still cautious due to sluggish demand for rubber and are worried Tokyo futures prices are getting expensive relative to overseas prices,” he said.
* “But funds seem to have the upper hand right now and other investors have no choice but to follow for fear of having to stock up on rubber when prices are much higher,” he said.
* Inagawa said volatility may rise next month as volume gets thin with the summer holidays.
* While it is not yet clear if there has been a recovery in demand, there may be some tightness in supplies as buyers have stuck to the sidelines amid an economic slump and inventories have dropped due to lower production.
* Japan’s crude rubber inventories fell 7.3 percent in the 10 days to July 20, bringing the inventory level to its lowest since December. [ID:nT14091]
* Japanese car manufacturers Honda Motor Co <7267.T> and Nissan Motor <7201.T> unexpectedly posted profits earlier this week and Mercedes-maker Daimler forecast improving performance this year but clear signs of sustained recovery for the world’s battered auto sector remained elusive. [ID:nLT277217]
* Other European automakers unveiled weak results for the first half of the year on Thursday and are set to keep tight control over costs but most predict an improvement in conditions for the rest of 2009. [ID:nLU365319]
* Oil extended gains well above $67 a barrel on Friday, after a 5.7 percent jump in the previous session, the biggest one-day gain since April 9, on U.S. data and earnings which renewed hopes of an economic recovery.

Source: Reuters

July 31 (Bloomberg) — Rubber booked the biggest monthly gain since December 2006 on renewed optimism that the world economy is recovering, spurring demand for the raw material.

Futures in Tokyo increased 21 percent this month after commodities jumped the most in more than four months yesterday on speculation that the worst of the global recession has passed and consumption of fuel, food and metals will rebound. Crude oil jumped 6.2 percent yesterday.

“Rubber got a boost from higher prices of crude oil and other commodities,” Hiroyuki Kikukawa, general manager of research at IDO Securities Co., said today by phone. Recent gains in stock markets also increased speculation that demand will rise from automakers, especially in China, he said.

January-delivery rubber gained as much as 6.4 percent to 196.5 yen a kilogram ($2,063 a metric ton) before settling at 195.5 yen on the Tokyo Commodity Exchange. The bourse suspended rubber trading for five minutes after the price increased by 10 yen a kilogram, triggering a circuit breaker system.

Rubber has gained 44 percent this year as global equities rallied and natural rubber exporters curbed shipments.

The MSCI Asia Pacific Index climbed 1.8 percent to 111.86 as of 3:58 p.m. in Tokyo. The benchmark has posted gains every month since March, the longest winning streak since July 2007. The Reuters/Jefferies CRB Index jumped 3.9 percent yesterday, the biggest gain since March 19.

Japanese manufacturers plan to boost production at least through August, easing concern a recovery that began with inventory restocking may fizzle.

Company Output

Companies said they aim to boost output 1.6 percent this month and 3.3 percent in August, a Trade Ministry report showed yesterday. The gain, led by makers of cars and steel, would follow an 8.3 percent increase in the three months ended June 30, the biggest quarterly advance in more than half a century.

Thailand, Indonesia and Malaysia, the largest rubber producers, may deepen a planned supply reduction this year as the recession curbs consumption, Abdul Rasip Latiff, chief executive officer of the International Rubber Consortium Ltd., said July 26.

The three producing countries will cut shipments by as much as 48,000 tons a month in the second half, Latiff said July 15. The trio reduced exports by 540,000 tons in the first five months of the year, more than the 414,000-ton reduction planned for the first half, he said.

Rubber for January delivery on the Shanghai Futures Exchange, the most-active contract, advanced 4.2 percent to 18,425 yuan ($2,697) a ton.

Source: Bloomberg

[Dow Jones] Tocom RSS3 rubber futures settle higher, recover from intraday lows on supply concerns, forecast that heavy rains likely to continue in major growing nation, Thailand, even next week. “Initially weaker crude prompted some selling, but short covering by intraday traders later in the day supported prices,” says Thailand-based broker. There have been positive leads from Shanghai rubber futures, says trading executive in Singapore. Benchmark Tocom January RSS3 rubber futures settle Y2.8 higher at Y184.7/kg after intraday low of Y180.3/kg. (SAM)

Source: Dow Jones

BANGKOK, July 30 (Reuters) – The Thai government has extended its rubber intervention plan until the end of 2010 to help prices continue their recovery from the lowest level in nearly seven years, senior officials said on Thursday.
“Since the plan was delayed for several months, the cabinet agreed to extend it from the end of 2009 to the end of 2010,” an official at the Ministry of Agriculture told Reuters.
In January the government approved an 8 billion baht ($235 million) plan to buy 200,000 tonnes of rubber from farmers and keep it in stockpiles to shore up prices.
However, implementation was delayed until June due to the protracted legislative process and paperwork, the official said.
In the meantime, prices have picked up sharply, leaving some traders wondering why government intervention was still thought necessary.
One trader said current prices seemed appropriate. Farmers could make a profit and buyers were not holding back.
“I don’t think we need the intervention programme at this moment,” the trader said, adding that the government might simply be trying to reassure farmers that it stood ready to help them.
Under the plan, the government buys unsmoked sheet (USS3) from farmers and transforms it into ribbed smoked sheet (RSS3), the export-grade rubber. It holds this in stock until it can sell at what it hopes to be a profit.
Domestic unsmoked sheet prices have doubled from the lowest in nearly seven years of 30 baht per kg in December to 60 baht per kg on Thursday.
The price of benchmark Thai RSS3 has also recovered to $1.90 per kg on Thursday from $1.10 per kg in December, traders said.
The rebound is largely due to strong demand from the auto industry in China, where the government has given tax incentives to car buyers to support the industry.
The Rubber Growers Cooperative Federation of Thailand, appointed by the government as its agent, would start buying rubber next week to build up stocks, said its chairman, Perk Lertwangpong.
“We could buy at least 10,000 tonnes of rubber to ensure that we will have enough rubber to run exports,” Perk said, referring to its first venture into the market next week.
Thailand, the world’s biggest rubber exporter, produces around 3 million tonnes of rubber annually, of which 90 percent is for export. ($1=34.07 Baht)

Source: Reuters

TOKYO, July 30 (Reuters) – Japan’s crude rubber inventories
totalled 8,275 tonnes as of July 20, down 7.3 percent from 10
days earlier, as shipments increased more than new inventory,
data from the Rubber Trade Association of Japan showed.
The latest figure is the lowest since December and
represents an increase of 6.3 percent from a year earlier,
according to the data, which is updated about every 10 days.
While an economic slump hit demand for rubber as automakers
slashed production, Japanese tyre makers have recently begun
buying rubber in the physical market as they are seen to have
completed inventory adjustments.

Following are details of the association’s latest data:
July 20 July 10 June 30 June 20 June 10
Crude rubber 8,275 8,929 9,471 9,765 9,933
Natural Latex 326 344 341 348 400
Synthetic
(solid) 1,201 1,213 1,129 1,255 1,163
Synthetic Latices
(D.R.C.) 23 23 23 23 23

Source: Reuters