May 25 (Bloomberg) — Rubber demand from India and China and tight supply after the low-production season will help keep the market strong, the Association of Natural Rubber Producing Countries said.

Demand in China, India and Malaysia, which account for more than 45 percent of global consumption, should stay robust, the association said in its May newsletter.

Natural-rubber imports by China rose 17 percent to 602,000 tons from January to April, and demand, including that of compound rubber, increased 26 percent to 1.05 million tons, according to the association, which represents 94 percent of global output of the commodity. Consumption of natural rubber in India during the first four months jumped 12 percent to 316,000 tons, it said.

Futures in Tokyo plunged 20 percent since reaching a 21- month high of 338.5 yen a kilogram ($3,777 a metric ton) on April 16. The most-active contract gained 1.7 percent last week after dropping to a five-month low of 250.9 yen on May 17. Rubber for October delivery, the most-active contract, fell 2.2 percent to settle at 271 yen on the Tokyo Commodity Exchange.

The International Rubber Consortium Ltd. forecast yesterday that natural rubber prices are likely to stay around current levels, because of increasing demand and a lack of shipments from Thailand.

Tight supplies from the main producing countries after the post-wintering season will support prices, the Association of Natural Rubber Producing Countries said. Trees shed their leaves during the wintering season that runs from February to April, lowering latex output.

The association today maintained the output forecast for its member countries at 9.37 million tons this year, a rise of 6.2 percent from 2009, it said.

The association represents Cambodia, China, India, Malaysia, Indonesia, Papua New Guinea, Philippines, Singapore, Sri Lanka, Thailand and Vietnam.

Source: Bloomberg

[Dow Jones] Physical prices of Thai USS3 rubber rise sharply to THB109.27-THB111.29/kg vs THB106.81 Friday, as supplies remain tight and factories buy to fulfill sold contracts. “It”s been raining so the farmers cannot tap. Although output will increase after that, the problem is that shipments that have to go out now cannot wait until then,” says exporter in south Thailand. Outside central markets, some factories paying THB111-112.5/kg. Rubber supplies in Thailand have been tight since dry wintering season began in February; although season has ended, unpredictable, adverse weather hitting current output. USS3 prices expected to fall once output improves significantly. Total quantity sold in three central markets of Thailand estimated at 20.7 tons versus 1.2 tons Friday: 10.3 tons in Hat Yai, 1.4 tons in Surat Thani, 9 tons in Chandee.

Source: Dow Jones

May 24 (Bloomberg) — Rubber advanced for a second day to two-week high as a drop in China’s stockpiles raised speculation that the biggest consumer may increase purchases and as the cash price in Thailand climbed on low supply.

Futures in Tokyo climbed as much as 4.8 percent, extending last week’s 1.7 percent gain, the best performance in five weeks. The price recovered after slumping to a five-month low of 250.9 yen per kilogram ($2,790 a metric ton) on May 17 amid concern that Europe’s sovereign debt crisis may stall economic growth.

Natural rubber stockpiles monitored by the Shanghai Futures Exchange dropped 2,536 tons to 27,363 tons, the bourse said May 21. It was the lowest level since July 2008. In Thailand, the largest exporter, prices on the physical market rose on limited supply and strong local demand, the Rubber Research Institute of Thailand said on its website.

“Low supply in China and a strong cash price in Thailand gave support to the price of rubber futures,” Kazuhiko Saito, an analyst at commodity broker Fujitomi Co. in Tokyo, said today by phone.

Rubber for October delivery, the most-active contract, gained as much as 12.7 yen to 279.4 yen on the Tokyo Commodity Exchange, the highest level since May 6, before settling at 277.2 yen. The May-delivery rubber contract, which expires tomorrow, rose 2.7 percent to settle at 377.8 yen.

Cash prices in Thailand advanced as drought lowered latex production, limiting supplies, while demand from local processers remains strong, the Rubber Research Institute of Thailand said on its website today.

Thai RSS-3 grade rubber for June delivery gained 2.1 percent to 120.85 baht ($3.73) a kilogram, excluding freight and insurance, the institute said.

September-delivery rubber on the Shanghai Futures Exchange added 2.4 percent to settle at 22,020 yuan ($3,225) a ton.

Source: Bloomberg

May 21 (Bloomberg) — Rubber advanced as a decline in Japan’s currency against the dollar raised the appeal of yen- based contracts and the cash price in Thailand, the largest producer, advanced on low supply.

Futures in Tokyo climbed for the third time in four days. Earlier, the price had lost as much as 3 percent as Asian stocks tumbled on concern that the U.S. economic recovery may falter and Europe’s government debt crisis may worsen.

Japan’s currency fell as the euro advanced on optimism that European Union officials meeting today will take further action to halt the region’s market turmoil. In Thailand, prices on the physical market rose on limited supply and strong local demand, the Rubber Research Institute of Thailand said on its website.

“Tight supply from Thailand gave a support to the price of futures,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone.

Rubber for October delivery, the most-active contract, gained 1.1 percent to settle at 266.7 yen per kilogram ($2,964 a metric ton) on the Tokyo Commodity Exchange.

Thai RSS-3 grade rubber for June delivery gained 0.4 percent today to 118.35 baht ($3.65) a kilogram, excluding freight and insurance, the institute said.

The yen traded at 89.96 per dollar at 5:13 p.m. in Tokyo. Yesterday it advanced to the highest level since May 6.

The euro gained for a third day against the dollar before European Union President Herman Van Rompuy hosts a meeting of finance ministers in Brussels to discuss reforms to economic governance.

‘Stave Off’

“European officials are likely to discuss more steps to stave off the crisis,” said Yoh Nihei, a Tokyo-based trading group manager at Tokai Tokyo Securities Co.

Rubber futures gained 1.7 percent this week, the best performance since the week ended April 16, as political turmoil in Thailand raised concern that supply from the world’s largest exporter may be disrupted.

Thailand’s military ended a mission to disperse anti- government protesters from their central Bangkok base after a May 19 assault left 15 people dead and sparked arson attacks on shopping malls and banks.

“As rubber production and shipment operations are mainly done in the nation’s southern area, violence in Bangkok and other cities may not have had a major impact on the physical trade,” Sugata said.

Rubber futures reached a 21-month high of 338.5 yen on April 16 because of a seasonal drop in Thai production and optimism that global economic recovery will increase demand for the commodity used in tires.

September-delivery rubber on the Shanghai Futures Exchange Declined 0.6 percent to 21,640 yuan ($3,170) a ton.

Source: Bloomberg

May 19 (Bloomberg) — Rubber gained for a second day, reversing earlier losses, as escalating violence in Thailand’s capital stoked speculation that supply from the world’s largest exporter may be disrupted.

Futures in Tokyo advanced after declining by as much as 2.1 percent on lower oil prices. Oil fell as the euro slumped to the lowest level in four years after Germany banned some speculative sales, triggering concern Europe’s debt crisis will worsen.

Gunfire and explosions rocked central Bangkok today as troops backed by armored vehicles surrounded a camp occupied by several thousand demonstrators seeking to oust Prime Minister Abhisit Vejjajiva. Still, most of Thailand’s rubber estates are in the south, hundreds of kilometers from the disturbances.

“Escalating violence in Thailand raised speculation supply may be affected,” Kazuhiko Saito, an analyst at commodity broker Fujitomi Co. in Tokyo, said by phone.

Rubber for October delivery, the most-active contract, gained 2.2 percent to settle at 267.7 yen per kilogram ($2,916 a metric ton) on the Tokyo Commodity Exchange.

The price earlier declined to as low as 256.6 yen as a drop in oil and stocks spurred investors to cut their holdings of risk assets, Saito said.

Germany’s Ban

Germany prohibited naked short-selling and speculating on European government bonds with credit-default swaps, sparking anxiety among investors about increasing regulation. The ban, which lasts until 2011, also applies to the shares of 10 banks and insurers, German financial regulator BaFin said.

Crude oil for June delivery fell 1.2 percent to $68.60 a barrel on the New York Mercantile Exchange at 1:17 p.m. in Tokyo. Earlier, the price slumped to a seven-month low as a stronger dollar weakened the appeal of the commodity.

“Investors are afraid that Germany’s ban on naked trading will reduce people’s appetite for risk,” said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc.

Rubber futures have retreated after touching a 21-month high of 338.5 yen per kilogram April 16 on a seasonal drop in supply from Thailand.

“Ongoing political unrest doesn’t disrupt rubber exports,” Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co., said today by phone from Bangkok.

September-delivery rubber on the Shanghai Futures Exchange added 1.2 percent to settle at 21,730 yuan ($3,183) a ton.

Source: Bloomberg