Source: Dow Jones

Futures in Tokyo fell as much as 1.6 percent, retreating further from a one-week high of 297.9 yen per kilogram ($3,309 a metric ton) reached yesterday. The price advanced to 306 yen on Jan. 15, the highest level since September 2008, amid optimism that the global economic recovery will boost demand.

Japanese machinery orders, an indicator of business investment in three to six months, declined 3.7 percent in January from December, signaling that any pickup in capital spending is likely to be slow. China’s inflation probably accelerated and exports climbed in February, according to surveys of economists, increasing the likelihood of the central bank raising interest rates from a five-year low.

“The market was dragged down by concern about China’s monetary tightening,” Kazuhiko Saito, chief analyst at Tokyo- based commodity broker Fujitomi Co., said today by phone. Japan’s machinery data also “raised questions about the strength of its economic recovery,” he said.

Rubber for August delivery, the most-active contract, lost as much as 4.6 yen to 290.5 yen before trading at 293.4 yen on the Tokyo Commodity Exchange at 11:14 a.m. local time.

China’s consumer prices rose 2.5 percent last month from a year ago, the most in 16 months, according to the median of 29 estimates in a Bloomberg News survey before tomorrow’s report. Economists project that the momentum will continue, sending the rate to as high as 4.4 percent during the year, a separate survey showed last week.

China Inflation

Inflation, property speculation and risks for banks are among Premier Wen Jiabao’s prime concerns after a record 9.59 trillion yuan ($1.4 trillion) of loans bolstered growth last year. Central bank Governor Zhou Xiaochuan said March 6 that while stimulus policies must end “sooner or later,” China needs to be cautious in timing an exit because a global recovery “isn’t solid.”

Losses in rubber futures were limited after data showed yesterday that China’s passenger-car sales rose 55 percent in February from a year earlier, Saito said. China, the world’s largest auto market, is also the biggest consumer of rubber.

China’s demand for cars, multipurpose vehicles and sport- utility vehicles increased to 942,900 units last month, the China Association of Automobile Manufacturers said. Total vehicle sales, which include buses and trucks, rose 46 percent to 1.21 million. The data came out after the Tokyo exchange closed yesterday.

China extended subsidies this year for consumers trading in old vehicles and for rural car buyers. Last year, the stimulus policies helped the country overtake the U.S. as the world’s biggest auto market. Consumers also bought more vehicles before the Lunar New Year, which began on Feb. 14.

September-delivery rubber on the Shanghai Futures Exchange gained 0.3 percent to 24,630 yuan ($3,608) a ton at 10:15 a.m. local time.

Source: Bloomberg

Grade Shipment Mar 9 Mar 8
Bids Offers Bids Offers
RSS3 Apr/May – 330-332 – 330-332
STR20 Apr/May – 328-330 – 330-332
SIR20 Apr/May – 315-316 – 319-320
SMR20 Apr/May – 321-323 – 320-323

Source: Dow Jones

Futures for August delivery, the most-active contract, lost as much as 1.4 percent to 293.1 yen before settling at 295.1 yen on the Tokyo Commodity Exchange. The drop ended a two-day, 4.5 percent winning streak. The price earlier climbed to 297.9 yen a kilogram ($3,309 a metric ton), the highest level since March 2.

Oil dropped for the first day in three as analysts forecast an increase in U.S. crude supplies last week, signaling demand from the biggest energy user may be slowing. Output in Malaysia may gain 17 percent this year to 1 million tons, Bernard Dompok, the nation’s minister for plantation industries and commodities, said in an e-mail today. Exports of rubber and rubber compound may climb 6.2 percent to 1.2 million tons, he said.

“Higher supply from Malaysia hurts the market sentiment in the near-term, prompting some investors to unwind positions,” Chaiwat Muenmee, analyst at DS Futures Co., said from Bangkok.

The Energy Department report scheduled for release tomorrow probably will show U.S. crude oil stockpiles expanded last week, according to the median of 12 estimates from analysts surveyed by Bloomberg News.

The yen advanced against all of its 16 major counterparts as an advance in Asian equities came to a halt, boosting demand for Japan’s currency as a refuge. The yen rose to 89.94.00 per dollar from 90.31 yesterday in New York.

“Rubber lost support from the energy and currency markets,” said Takaki Shigemoto, an analyst at JSC Corp. in Tokyo. “Losses in equity markets also reduced investors’ risk appetite, leading to sale of commodities.”

Wintering

In the cash market, shippers in Thailand, the top producer and exporter, offered RSS-3 grade rubber for May shipment at $3.26 a kilogram, Shigemoto said. The price gained from $3.24 on March 5 as supply declined amid the wintering season, the low- production period that normally lasts until April, he said.

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

Supply in Thailand had “robust” annualized growth of 23.8 percent in January, according to a February report from the Association of Natural Rubber Producing Countries.

September-delivery rubber on the Shanghai Futures Exchange gained 0.5 percent to settle at 24,550 yuan ($3,596) a ton.

Source: Bloomberg

Source: Dow Jones