July 28 (Bloomberg) — Rubber declined for the first time in 10 days on speculation demand from China, the world’s largest consumer, may weaken after prices climbed to the highest in more than eight months.

Futures in Tokyo lost as much as 1.6 percent after reaching the highest since Nov. 10. Prices advanced 14 percent this month, heading for the best monthly gain since December 2006, as a rally in global equities raised speculation economic growth will boost raw material demand.

“The price surge put a brake on Chinese purchases,” Kazuhiko Saito, chief analyst at Tokyo-based commodity broker Fujitomi Co, said today by phone. “Chinese buyers will probably wait until prices return to an affordable level.”

December-delivery natural rubber lost as much as 3 yen to 183.7 yen a kilogram ($1,934 a metric ton) on the Tokyo Commodity Exchange before trading at 184 yen at 11:21 a.m.

Rubber inventories monitored by the Shanghai Futures Exchange rose 1,898 tons to 48,693 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the exchange said July 24. It was the highest volume since April.

Rubber futures gained 35 percent this year after losing 56 percent in 2008 as exporters reduced shipments to support prices amid the global recession.

Thailand, Indonesia and Malaysia, the three-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. Indonesia, the second-largest exporter, reduced its output target for this year to 2.2 million metric tons from 2.5 million tons, Asril SutanAmir, the chairman of the Indonesian Rubber Association, said July 23.

Thailand, Indonesia and Malaysia 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, fell 1.6 percent to 17,630 yuan ($2,581) a ton at 10:26 a.m. local time.

Source: Bloomberg

TOKYO, July 24 (Reuters) – Key Tokyo rubber futures rose above 180 yen per kg for the first time since November on Friday in an eight-day rally as recent gains in oil prices fuelled optimism over demand for the industrial commodity.
* Rubber futures were also aided by steady buying by investment funds, which has helped maintain momentum in the market in the past several days, traders said.
* The key Tokyo Commodity Exchange rubber contract for December delivery <0#JRU:> settled at 179.9 yen, up 4.7 yen or 2.7 percent from the previous day.
* The TOCOM market last marked an eight-day rising streak in August last year.
* The December contract earlier rose as high as 182.0 yen, the highest for any benchmark since Nov. 12, before profit-taking set in.
* It rose 5.6 percent on the week, adding to the previous week’s 8.5 percent gain.
* Concerns about the financial health of U.S. automakers dragged the Tokyo market below the 180 yen level in November.
* The Tokyo market had failed to break above that level given a slump in global auto production, resulting in weak tyre demand.
* But improved technical charts suggest the market may test 200 yen, the next psychological barrier, in the near future, some traders said.
* “Buying from funds had pulled up the market. They were real bulls as they increased buying in the rally,” said a manager at a Japanese commodity brokerage.
“But dealers started to sell at or above 180 yen, putting a lid on gains,” he said. Profit-taking after a speedy run-up was set to limit gains at 182-183 yen for now and then 185-186 yen, he said.
* China has recently bucked the trend in the struggling global car industry, resulting in a gradual return of Chinese buyers in the physical rubber market.
* Oil prices inched lower on Friday, after rising to a three-week high above $67 a barrel the day before propelled by a rally on Wall Street driven by strong corporate earnings and positive U.S. housing data. [O/R]
* U.S. existing home sales notched their third straight monthly rise in June and prices hit the highest level since October, fueling hopes that the housing sector is finally on the mend and will help support a broader economic recovery. [ID:nN23398724]
* Japan’s Nikkei share average <.N225> followed U.S. stocks higher and closed up 1.6 percent.

Source: Reuters

July 24 (Bloomberg) — Rubber climbed to an eight-month high as producers reduce supply and positive economic data fueled speculation demand for raw materials will rise.

Futures in Tokyo advanced as much as 3.9 percent and booked the third weekly gain. Indonesia, the world’s second-biggest rubber producer, cut its output target for this year to 2.2 million metric tons from 2.5 million. Asian stocks rose for a ninth day as sales of existing U.S. homes climbed and South Korea’s economy grew at the fastest pace in almost six years.

“Futures drew support from supply restrictions by rubber producers and an optimistic mood in the financial markets,” Hisaaki Tasaka, an analyst at Tokyo-based commodity broker ACE Koeki Co., said today in a phone interview.

Natural rubber for December, the most-active contract, gained as much as 6.8 yen to 182 yen a kilogram ($1,919 a ton) on the Tokyo Commodity Exchange, the highest since Nov. 12. Prices settled up 2.7 percent at 179.9 yen, increasing 5.1 percent this week.

Indonesia reduced its output target as low prices discouraged farmers from tapping, Asril SutanAmir, the newly appointed chairman of the Indonesian Rubber Association, said yesterday in Bali. “Besides that, we also see that demand is still low,” he said.

Indonesia’s rubber production in the first half of this year “was slightly below one million tons,” said Amir, elected chairman for a three-year term at a meeting yesterday.

Price Gains

The most-active rubber contract has gained 32 percent this year, after plunging 56 percent in 2008 as the global recession curbed demand, prompting producers to reduce shipments.

Thailand, Indonesia and Malaysia will cut shipments by as much as 48,000 tons a month in the second half, Abdul Rasip Latiff, chief executive officer of the International Rubber Consortium Ltd., said on 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, added 0.8 percent to 17,630 yuan ($2,581) a ton.

Source: Bloomberg

[Dow Jones] Physical prices of Thai USS3 rubber flat in sluggish trade due to lack of firm leads, while rangebound futures also provide little in way of direction. Rain continues to hamper tapping work in southern Thailand, with supply still tight, says trader. USS3 traded on Hat Yai Central Market unchanged from yesterday at THB58.46/kg.

Source: Dow Jones

[Dow Jones] Tocom rubber futures little changed in thin, rangebound trade, with participants generally opting for sidelines awaiting firmer sense of direction. Tight supply due to rain in key producing countries, firm spot market prices likely to limit downside, though Tocom expected to remain in narrow Y170-Y177 range today, pending fresh cues, participants say. At 0207 GMT, benchmark December RSS3 contract unchanged from yesterday at Y175/kg.

Source: Dow Jones