Rubber increased as a weaker Japanese currency raised the appeal of yen-based contracts and data showed stockpiles monitored by the Tokyo Commodity Exchange dropped to the lowest level in at least nine years.

Futures in Tokyo climbed for a second day and gained as much as 0.8 percent after declining last week by 3.3 percent. The yen retreated from a seven-month high against the dollar on speculation that the central bank may weaken the currency.

Natural-rubber stockpiles monitored by the Tokyo exchange dropped by 29 percent to 1,341 metric tons as of July 10, data from the bourse showed. It was the lowest volume since at least 2001, exchange spokesman Seiki Ichimura said. Data before that year were unavailable, he said.

“As domestic stockpiles are at a very low level, short- position holders may have to buy back the nearby contract,” Takaki Shigemoto, an analyst at JSC Corp. in Tokyo, said today. Speculators with short, or sell, positions in the nearby contract must buy them back by the July 26 expiry date, unless they can deliver the raw material.

December-delivery rubber gained as much as 2.1 yen to 266 yen per kilogram ($3,059 a metric ton) before settling at 264.5 yen on the Tokyo Commodity Exchange. July-delivery rubber, which lost 3 percent today, surged by as much as 2.8 percent on July 16 amid speculation that the low stockpiles may make physical delivery difficult at the expiry.

“The market was supported by speculation that the nearby contract may surge before its expiry,” Shigemoto said today by phone. The July contract settled at 344.4 yen.

Gains Limited

Gains in futures were limited after U.S. home-builder confidence dropped more than forecast, renewing concern the economic recovery may falter.

The National Association of Home Builders/Wells Fargo confidence index dropped to 14 this month, the lowest level since April 2009, from 16 in June, data from the Washington- based group showed yesterday. Builders in the U.S. turned more pessimistic in July than forecast, a sign the expiration of a government tax credit will depress home construction.

The yen fell against all of its 16 major counterparts amid speculation recent gains will spur Japanese authorities to weaken the currency.

The Bank of Japan may take steps to ease monetary policy should the yen stay at about 85 per dollar, Dow Jones Newswires reported yesterday, citing people familiar with deliberations at the central bank.

November-delivery rubber on the Shanghai Futures Exchange gained 1.7 percent to 21,720 yuan ($3,205) a ton at 2:45 p.m. local time.

Source: Bloomberg

[Dow Jones] Asian physical rubber prices mostly steady; some buyers on sidelines as Tocom closed for public holiday, says Thailand-based trader; adds “India continues to be active in the market.” Indonesia”s SIR20 sold around $2,900/ton, FOB, for prompt July shipment from Belawan. Malaysia”s SMR20 traded at $2,955/ton, FOB, for August, September shipment. Late Friday, a few hundred tons of STR20 changed hands at $3,140/ton, CIF, for July shipment to India.

Source: Dow Jones

Rubber futures climbed, led by a rally in the nearby contract amid speculation that low stockpiles in Japan may make physical delivery difficult at its expiry this month.

Futures in Tokyo gained for the second time this week. The nearby contract, which will expire on July 26, jumped as much as 2.8 percent, widening the price differential with the December- delivery futures, the most-active contract.

Natural rubber stockpiles monitored by the Tokyo Commodity Exchange dropped by 6.2 percent to 1,880 metric tons on June 30, nearing a record low of 1,408 tons reached in October 2008, according to exchange spokesman Seiki Ichimura. Supply decreased after rain disrupted tapping in Thailand, the world’s largest producer and exporter, said Kazuhiko Saito, an analyst at Tokyo- based broker Fujitomi Co.

“Tight supply is spurring a short-covering rally,” Saito said by phone today. Speculators with short, or sell, positions in the July contract must buy them back by July 26, the expiry date, unless they can deliver the raw material.

December-delivery rubber gained as much as 1.6 percent to 266.5 yen per kilogram ($3,056 a ton) before settling at 263.9 yen on the Tokyo Commodity Exchange. The price lost 3.3 percent this week, the second drop in three weeks.

July-delivery rubber gained as much as 2.8 percent to 357.5 yen before settling at 355 yen. Last month, the June-delivery contract expired at 372 yen.

Gains in futures were limited amid concern that a slowdown in economic growth in China, the largest consumer, may curb demand for the commodity used in tires, Saito at Fujitomi said.

Economic growth in China slowed to 10.3 percent in the second quarter from 11.9 percent in January-March, data showed yesterday. China’s expansion eased after the government tempered credit expansion, investment spending and property speculation.

November-delivery rubber on the Shanghai Futures Exchange gained 0.8 percent to 21,525 yuan ($3,177) a ton at 2:53 p.m. local time.

Source: Bloomberg

[Dow Jones] Tocom rubber futures settle 0.7% lower after moving in tight range of Y260.8-Y264.9/kg in day session as yen strengthens against greenback as weaker-than-expected Chinese economic data add to uncertainty over global economic outlook; further downward pressure from lower crude oil prices overnight, extending losses in Asian trading hours. Concerns over slowing Chinese economy, as tire output falls 3.3% on month, say Singapore-based dealer; adds sentiment bearish, Tocom may see more downside. Benchmark December rubber contract settles Y1.8 lower at Y262.4/kg.

Source: Dow Jones

[Dow Jones] Tocom rubber futures settle 1.6% higher, rebounding from 1-month low in night session as yen weakens against greenback, crude pares losses in earlier trading to move steadily upward near close of Tocom trading day. However, just November, December contracts up; July to October all down as seasonal factors, macro-economic uncertainty weigh. Tocom rubber may continue moving sideways with downward bias, says Tokyo-based analyst; pegs support at Y253.6/kg. Benchmark December rubber contract settles Y4.1 higher at Y264.2/kg.

Source: Dow Jones