Feb. 26 (Bloomberg) — Rubber advanced for a third week as concerns over supply shortages during the low-production season in Thailand and rising crude oil prices boosted the appeal of the commodity used in tires.

Futures in Tokyo gained as much as 0.8 percent to 296.9 yen a kilogram ($3,326 a metric ton) after declining by 0.6 percent. The yen-based contract reached 303.4 yen on Feb. 24, the highest level since Jan. 20, and has added 0.5 percent this week.

“Fundamentally, low supply in Thailand will continue to support prices,” Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co., said by phone from Bangkok. Still, “the market is in consolidation mode amid a lack of fresh factors.”

Thailand is entering the low-production season, which normally begins in the nation’s main growing areas in late March. Rubber trees shed leaves and latex output slows during the season, known as wintering, reducing the raw material supply.

“Supplies in Thailand are tight” and there are lots of buyers, Roka Komiya, trader at Marubeni Corp. said by phone from Tokyo. “That’s sustaining the price.”

Rubber for August delivery, the most-active contract, advanced 0.5 percent to settle at 296.1 yen on the Tokyo Commodity Exchange.

Thai rubber auction prices declined today after 12 straight days of gains, pressured by crude oil’s drop yesterday, according to the Rubber Research Institute of Thailand. “Limited supply cushioned the downside of the local price fall,” the institute said on its Web site today.

The auctioned price of unsmoked sheets dropped 0.6 percent to 100.80 baht ($3.05) per kilogram. Ribbed smoked sheets declined 0.8 percent to 105.27 baht a kilogram, according to the organization.

May-delivery rubber on the Shanghai Futures Exchange fell 0.5 percent to settle at 24,850 yuan ($3,640) a ton. It climbed to 25,450 yuan yesterday, the highest level since Jan. 21.

Source: Bloomberg

BANGKOK, Feb 26 (Reuters) – Tokyo rubber futures ended higher
on Friday, pushed up by steady oil prices and tight supply on the
physical market, with a lower yen providing additional support,
dealers said.
* The benchmark rubber contract on the Tokyo Commodity
Exchange <0#JRU:> for August delivery rose 1.4 yen to settle at
296.1 yen ($3.32) per kg.
* TOCOM rubber was expected to rise next week to test
resistance at 300 yen per kg after this week’s correction,
dealers said.
* Oil steadied above $78 a barrel on Friday as traders
awaited a slew of U.S. data later in the day to gauge the health
of the economy of the world’s largest oil consumer. [O/R]
* Physical supply was falling as Thailand, the world’s
biggest rubber exporter, is in the dry season, when rubber trees
stop producing latex.
* The yen dipped on Friday — although it held on to the bulk
of its gains from the day before — as doubts about the pace of a
global economic recovery and persistent worries about sovereign
debt problems in Greece kept investors away from riskier
currencies. [ID:nTOE61P05F]
* A lower yen makes dollar-based rubber more expensive and
usually encourages players to take speculative buying positions
on Tokyo rubber futures.
($1=89.13 Yen)

Source: Reuters

Feb. 25 (Bloomberg) — Rubber retreated from a five-week high as a rally in the Japanese currency and falling crude oil prices reduced appetite for yen-based contracts.

Futures in Tokyo fell as much as 2.4 percent after reaching 303.4 yen per kilogram ($3,380 a metric ton) yesterday, the highest level since Jan. 20. It was the second decline this week.

Japan’s currency advanced for a fifth day on speculation Greece’s credit rating will be downgraded as the nation struggles with pushing through fiscal cuts demanded by the European Union. The yen is trading near its highest against the dollar since Feb. 10. Oil fell below $80 a barrel, reducing the appeal of natural rubber as an alternative synthetic product made from petroleum.

“A higher yen was the largest drag on the price of rubber,” Kazuhiko Saito, chief analyst at Tokyo-based broker Fujitomi Co., said today by phone. “There were no aggressive sellers as rubber looks fundamentally strong on demand recovery and seasonally tight supplies.”

Rubber for August delivery, the most-active contract, lost as much as 7.3 yen to 294.2 yen, before settling at 294.7 yen on the Tokyo Commodity Exchange.

“Oil prices, stocks and dollar-yen weaken, drove rubber prices lower,” Roka Komiya, trader at Marubeni Corp. said by phone from Tokyo. The market may fall further, he added.

Limited Supply

Crude oil for April delivery fell as much as 45 cents, to $79.55 a barrel in electronic trading on the New York Mercantile Exchange. It was at $79.61 a barrel at 2:38 p.m. Singapore time.

Thai rubber auction prices have risen for 12 days as worries over limited supplies accelerate purchases, mainly by Chinese buyers, the Rubber Research Institute of Thailand said on its Web site today.

The auction price of unsmoked sheets gained 0.7 percent to 101.42 baht ($3.07) per kilogram. Ribbed smoked sheets rose 0.7 percent to 106.16 baht a kilogram, according to the institute.

“Supplies are not so plentiful,” said Komiya. “Even though buyers offer to buy at high prices, it’s difficult to get.”

Thailand, the largest producer and exporter, is entering the low production season, reducing the raw material supply. Rubber trees shed leaves and latex output slows during the season, known as wintering, that normally begins in the nation’s main growing areas late March.

Thai shippers offered so-called RSS-3 grade rubber for April shipment at $3.27 a kilogram, compared with $3.25 yesterday, according to the institute’s website.

Thailand’s natural rubber production this year is estimated to fall to 3.1 million metric tons, compared with 3.33 million tons forecast earlier, because of dry weather caused by the El Nino weather event, Apichart Jongskul, secretary general of the Office of Agricultural Economics said Jan. 13

May-delivery rubber on the Shanghai Futures Exchange fell 0.3 percent to settle at 24,970 yuan ($3,658) a ton. It earlier rose to 25,450 yuan, the highest level since Jan. 21.

Source: Bloomberg

[Dow Jones] Physical prices of Thai USS3 rubber rise to THB100.09-THB101.31/kg vs THB99.55-THB100.19/kg yesterday, first day this year prices exceed THB100/kg at all three central markets. Outside central markets, factories paying around THB100.5/kg as some older stock acquired, but this most likely to go up as USS3 prices continue ascent, says Phuket-based rubber factory executive. USS3 prices propped up by seasonal wintering when trees shed leaves, rubber yield falls. Total quantity sold in three central markets of Thailand estimated at 128.15 tons versus 167.6 tons yesterday: 58.15 tons in Hat Yai, 25 tons in Surat Thani, 45 tons in Chandee. (HLN)

Source: Dow Jones

[Dow Jones] Tocom rubber futures settle slightly higher on strong supply-demand fundamentals, spillover effect from Shanghai rubber futures, short covering. Tocom rubber opened lower due to data overnight showing fall in U.S. consumer confidence to 10-month low, weaker crude below $80/bbl, downward pressure from other commodities, firmer yen. But Tocom broke Y300 mark when Shanghai rubber futures climbed above CNY25,000/ton. “Physical prices continue to hold strong in Thailand, propping up prices in the futures market,” Tokyo-based commodities brokerage executive says; adds some short covering took place in late trade. Tocom rubber futures expected to hold firm tomorrow on strong fundamentals, but may have knee-jerk effect from U.S. Fed chairman Ben Bernake”s comments on U.S. durable goods and gross domestic product data if delivered. Benchmark Tocom August contract settles up Y0.7 at Y301.5. (HLN)

Source: Dow Jones