June 17 (Bloomberg) — Rubber declined for the first time in six days as a stronger Japanese currency reduced the appeal of yen-denominated contracts and output in major producing countries increased.

Futures in Tokyo dropped after reaching a two-week high yesterday. The yen advanced amid concern that Europe’s debt crisis will impair the region’s economic recovery, boosting demand for Japan’s currency as a refuge.

Natural rubber output in Malaysia, the world’s third- largest grower, may surge 17 percent this year as rising prices prompt farmers to increase tapping, offsetting crop damage from drought, the Malaysian Rubber Board said. Supply from Thailand, the largest producer and exporter, will increase seasonally, said Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo.

“Output in Thailand has been growing, leading to increased shipments by Thai exporters,” Sugata said by phone today. Rising supply put a drag on rubber futures, he added.

November-delivery rubber lost as much as 3.8 percent to 275.0 yen a kilogram ($3,016 a metric ton) before settling at 275.3 yen on the Tokyo Commodity Exchange.

Natural rubber production this year may climb to as much as 1 million metric tons, Salmiah Ahmad, director general of the Malaysian board, said in an interview. That is more than the 900,000 tons forecast by the nation’s Plantation Industries and Commodities Ministry in May. Output last year was 856,189 tons.

Recovery May Slow

Futures also declined as a drop in U.S. housing starts raised concerns that the economic recovery may slow, weakening demand for the commodity used in tires.

Asian equities decreased after a U.S. Commerce Department report showed housing starts slumped 10 percent in May, the biggest drop since March 2009.

“Uncertainty about the economic outlook sapped investor interest in the commodity,” Sugata said.

November-delivery rubber reached 286.7 yen yesterday, the highest level since June 1, after a report showed New York-area manufacturing expanded for an 11th month. The price dropped to a three-week low of 253.6 yen on June 9.

The yen strengthened against all 16 major counterparts on speculation European Union leaders will discuss ways to tighten financial-market regulation. The euro fell for a second day versus the dollar after Spain’s central bank said it plans to publish the results of stress tests carried out on the nation’s lenders in order to quell speculation that it needs international aid.

November-delivery rubber on the Shanghai Futures Exchange lost 1.7 percent to 21,455 yuan ($3,141) a ton. The market resumed trade today after a three-day public holiday.

Source: Bloomberg

June 16 (Bloomberg) — Rubber climbed to a two-week high after growth in New York manufacturing boosted expectations that demand will increase for the commodity used to make tires.

Futures in Tokyo advanced for a fifth day and reached the highest level since June 1. The price has gained 3.5 percent this year amid speculation that Europe’s sovereign-debt crisis may not stall global economic recovery.

Equities and commodities rallied after reports showed New York-area manufacturing expanded for an 11th month. The MSCI Asia Pacific Index gained for a fifth day after having fallen 11 percent from a 52-week high on April 15 on concern that mounting government deficits will deter some European nations from shoring up their economies through spending.

“Investor attention has shifted to the strength of the U.S. and Chinese economies from the European debt problems,” Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co., said today by phone. “Rubber chased a rally in equities and energy markets.”

November-delivery rubber gained as much as 3.1 percent to 286.7 yen a kilogram ($3,125 a metric ton) before settling at 285.7 yen on the Tokyo Commodity Exchange.

All 57 stocks in the S&P 500 Industrials Index gained after the Federal Reserve Bank of New York’s general economic index increased to 19.6, in line with the median forecast of economists surveyed by Bloomberg News. Prices of goods imported fell 0.6 percent in May, led by the biggest drop in petroleum costs since December 2008, Labor Department figures showed.

U.S. Manufacturing

“U.S. manufacturing, supported by low interest rates and the buoyant Chinese economy, are recovering steadily,” said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc.

Rubber futures dropped to a three-week low on June 9 on expectations that supply from Thailand, the world’s largest producer and exporter, will increase seasonally.

Cash-rubber prices in Thailand extended gains yesterday as a slower-than-usual gain in supply wasn’t enough to meet increasing demand, the Rubber Institute of Thailand said on its website.

The free-on-board price of RSS-3 grade for July delivery gained 0.6 percent to 115.10 baht ($3.55) a kilogram yesterday, according to the institute.

The Shanghai rubber market is closed for a holiday and reopens on June 17.

Source: Bloomberg

[Dow Jones] Tocom rubber futures settle 1.2% higher, shrugging off earlier losses as firm supply-demand fundamentals support. Trade volume still relatively light as China on public holiday, but there may be buying on expectation that China will return to market after holiday to replenish depleting stocks, says trade participant. More output in Thailand now compared with ultra tightness in wintering season, but output quantity below expectation. Tocom benchmark rubber tested resistance at Y280/kg. Market bullish, say traders, could possibly post more gains, although new developments in external markets could affect sentiment. Benchmark November rubber contract settles Y3.4 higher at Y278.2/kg, off intraday high of Y280/kg.

Source: Dow Jones

June 14 (Bloomberg) — Rubber advanced for a third day, climbing to a one-week high, as costlier crude oil, a weaker yen and signs the global economic recovery remains intact boosted optimism that demand for the commodity used in tires may grow.

Futures in Tokyo advanced as much as 3.8 percent, extending the 1.8 percent climb in the previous two sessions, after Japan’s large manufacturers said business conditions improved from three months ago, according to a government report today.

Crude oil advanced in New York on speculation that sustained growth in the U.S. economy will boost fuel demand. The Japanese currency fell for a third day against the euro on signs the global economic recovery is gaining momentum.

“Sentiment remains favorable as signs of global economic expansion spur speculation demand for tires will continue growing,” said Chaiwat Muenmee, an analyst at DS Futures Co. “Crude oil’s rally, trading above $74 a barrel, and the weakening of the Japanese yen supported the rubber market.”

Rubber for November rose as much as 10 yen to 274.8 yen a kilogram ($2,990 a metric ton), the highest level since June 7, before settling at 274.8 yen on the Tokyo Commodity Exchange.

Japan’s large manufacturers’ sentiment was 10 points, compared with 4.3 points last quarter, the government said in the report. The survey asks respondents whether conditions improved from the previous quarter, and a positive number means optimists outnumber pessimists.

Crude’s Gain

Crude for July delivery rose as much as 2 percent to $75.25 a barrel in electronic trading on the New York Mercantile Exchange, making synthetic rubber more expensive. The yen fell against all 16 of its major counterparts, making yen-based rubber contracts cheaper for holders of other currencies.

Natural-rubber inventories monitored by the Shanghai exchange totaled to 17,881 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the bourse said on June 11. That compares with 151,832 tons on Jan. 21, the highest level since November 2004, according to data compiled by Bloomberg.

Speculation that Chinese buyers will increase purchases because of the lower stockpiles fueled today’s gains, Roka Komiya, a trader at Marubeni Corp., said by phone from Singapore.

“Some Chinese buyers have come into the market since last week,” Komiya said. “China’s stockpile situation is pushing up the market.”

The Shanghai Futures Exchange is closed today for a holiday, and will reopen on June 17. The September-delivery contract climbed 1.8 percent to settle at 21,825 yuan ($3,195) a ton on June 11.

“Further gains in Tocom prices may be limited as increasing supplies from Thailand are still pressuring the market,” Chaiwat said from Bangkok. Output of ribbed smoked sheet RSS-3 rubber has averaged 200 tons a day this month, compared with slightly more than 100 tons a day in May, Chaiwat said.

Cash prices in Thailand advanced, driven by demand from local tire manufactures as the domestic automotive sector is expected to remain robust until the third quarter.

The free-on-board price of RSS-3 grade for July delivery gained 0.4 percent to 114.35 baht ($3.53) a kilogram today, the Rubber Institute of Thailand said on its website. It reviews the price daily and issues new data in the afternoon.

Source: Bloomberg

June 11 (Bloomberg) — Rubber climbed for a second day, paring a weekly loss, on optimism that economic expansion in Asia will improve appetite for the commodity used to make tires.

Futures in Tokyo advanced as much as 2.4 percent to the highest level since June 7. The price is headed for a second weekly loss as concerns remain that the sovereign debt crisis may spread from Greece to other European nations.

The ECB yesterday raised its euro-region growth forecast for this year to around 1 percent from 0.8 percent. Asian stocks advanced for the second straight day as investor appetite for riskier assets increased. Japan’s currency retreated against the dollar, raising the appeal of yen-based contracts.

“A pessimistic view on the economic outlook receded after data showed strong growth in Chinese exports and accelerated recovery in Japan’s economy,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone. “Rubber tracked gains in industrial commodities.”

Rubber for November delivery rose as much as 6.3 yen to 269.3 yen a kilogram ($2,941 a metric ton) before settling at 264.8 yen on the Tokyo Commodity Exchange.

The price has lost 3.3 percent this week, extending a 3.8 percent drop last week. Output in Thailand, the world’s largest producer and exporter, expanded seasonally, leading to a drop in the physical market and capping Tokyo futures, Sugata said.

Cash Rubber

“Increasing supplies from Thailand pressured the upside of the rubber prices,” Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co. said by phone from Bangkok.

The free-on-board price of RSS-3 grade rubber for July delivery dropped 0.4 percent to 113.85 baht ($3.51) a kilogram, the Rubber Institute of Thailand said on its website. It reviews the price daily and issues new data in the afternoon.

September-delivery rubber on the Shanghai Futures Exchange climbed 1.8 percent to settle at 21,825 yuan ($3,195) a ton.

Exports from China jumped 48.5 percent in May from a year earlier, according to data released yesterday, indicating that Europe’s sovereign-debt crisis has yet to restrain the world’s fastest-growing major economy. China is the world’s largest natural rubber consumer, followed by the U.S. and Japan.

Japan’s economy rose at an annualized 5 percent rate in the three months ended March 31, faster than the 4.9 percent reported last month and the biggest gain since the second quarter of 2009, a government report showed today.

Source: Reuters