[Dow Jones] Physical prices of Thai USS3 rubber rise to THB163.05-THB163.08 vs THB160.66-THB161.25/kg Friday on strong demand. Outside the central markets, factories are paying around THB165-THB168/kg. Sales in Thailand”s three central markets total around 78.5 tons today vs 67.6 tons Friday: 36.5 tons in Hat Yai, 7 tons in Surat Thani, 35 tons in Chandee.

Source: Dow Jones

[Dow Jones] Tocom RSS3 rubber futures settle lower after moving both ways in volatile trade. After prices rose above Y475/kg, profit-taking set in investors rushed to liquidated longs before the close, says an analyst in Tokyo. Many investors weren”t expecting the decline but had to stop losses with prices moving toward Y465/kg, says a Singapore-based trading executive. The benchmark Tocom July rubber futures contract ends Y3.1 lower at Y466/kg.

Source: Dow Jones

[Dow Jones] Asian physical rubber prices are mostly steady but prices were choppy through the day in line with the futures market; trade is winding down ahead of the Lunar New Year holidays, say traders. “The Chinese are all heading back to their hometowns, we expect trade to be quiet in the next week or two,” says a Singapore-based dealer. Thailand”s RSS3 for March shipment changes hands at $5,670/ton, FOB–the shipment of a few hundred tons was sold at a lower price to a tire major. “We are actually not offering RSS3, but this is a special price for them, as they”ve been a good customer,” says the exporter. Thai STR20 traded at $5,530/ton, FOB, for March shipment, also to a tire major. Malaysia”s March SMR20 trades at $5,510/ton, FOB.

Source: Dow Jones

[Dow Jones] Tocom rubber futures settle 0.4% higher in a day of choppy trade, with prices moving in both positive and negative territories; supply-demand fundamentals support Tocom, but the Japanese bourse is affected by recent volatility in Shanghai rubber ahead of the Lunar New Year holiday starting Feb. 2. “We may see investors accumulating very, very short positions in the run-up to the week-long holiday in China; after that, Tocom is likely to take external cues, possibly from the currency markets while China is on holiday,” says a Tokyo-based commodities brokerage analyst. The benchmark July rubber contract settles Y1.8 higher at Y469.1/kg after moving in a wide range of Y456.1-Y471

Source: Dow Jones

Natural rubber demand may grow 4.6 percent this year, boosted by strong vehicle sales, with consumption continuing to outpace supply in coming years, according to the International Rubber Study Group.

Global consumption may gain to 11.2 million metric tons in 2011 and 11.6 million tons next year, said Stephen Evans, the group’s secretary general. The supply deficit will support prices of the commodity used to make tires and gloves, he said.

Rubber gained to a record this week, extending a 50 percent advance in 2010, as rising car sales led by China and India boost demand, and rains disrupted tapping in key growing nations of Southeast Asia. Natural rubber demand in China, the biggest consumer, may rise 9 percent this year, said the Association of Natural Rubber Producing Countries.

“From the fundamental point of view, we don’t see relief coming in the next few years because of over-demand and undersupply,” said Evans. “The price is likely to stay firm,” he said.

Demand may rise further to 13.1 million tons in 2015 and 15.4 million tons in 2020, while production may be about 13.8 million tons, said Evans. The estimates are based on normal production conditions, excluding a potential increase in supply from new plantings and increased tapping driven by high prices, he said.

Above-average rain from a La Nina weather event has curbed output in Indonesia, Malaysia and Thailand, the biggest producer. The weather pattern may last until the middle of the year, causing higher-than-usual rainfall in Thailand during January to April, the Thai Meteorological Department has said.

Further Tightness

“If the demand stays strong, we’ll see further tightness in the market,” Evans said. Still, it isn’t “worrisome, as high prices will encourage tappers,” he said.

The most-active contract on the Tokyo Commodity Exchange gained as much as 3.2 percent today to 474.8 yen per kilogram ($5,725 a ton).

Futures fell 4.6 percent in the past two days after reaching a record 484.9 yen on Jan. 24 on worries China may take additional steps to curb inflation, reducing demand. China raised interest rates twice in the fourth quarter in a bid to choke off inflation.

“In the fast-moving economy like China, even a significant move may not be enough to slow it down,” Evans said. “There is no fundamental evidence that demand will go off a cliff.”

Natural rubber consumption in China may rise to 3.6 million tons this year and India’s consumption may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries.

China Growth

China’s economy grew 10.3 percent in 2010, the fastest pace in three years and up from 9.2 percent a year earlier, the government said this month. China’s vehicle sales may grow 10 percent to 15 percent this year after jumping 32 percent to 18.06 million vehicles in 2010, according to a forecast by the China Association of Automobile Manufacturers.

Natural-rubber supply from members of the Association of Natural Rubber Producing Countries, which represent 92 percent of global supply, may expand 4.8 percent this year to about 9.9 million tons, the group said Jan. 25. The forecast is lower than an “optimistic target” by member governments of 7.7 percent growth to 10.2 million tons, it said.

The International Rubber Study Group counts 16 countries plus the European Union as members, according to its website. Thailand and Malaysia, the world’s largest and third-largest producers, are part of the group, while Indonesia, the second- largest grower, is not.

Source: Bloomberg