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TOKYO, Dec 22 (Reuters) – Key Tokyo rubber futures rose 8 percent to a one-month high approaching 140 yen on Monday, lifted by firm oil prices as the market waited for details of a scheme to raise prices that Thailand was due to begin drafting this week.
* The key Tokyo Commodity Exchange rubber contract for June delivery <0#JRU:>, which debuted on Monday, hit an intraday high of 138.5 yen per kg, the highest since Nov. 25.
* It closed at 138.3 yen, up 8 percent from the opening price of 128.0 yen.
* A Tokyo-based trader said he believes the market bottomed out when it briefly breached 100 yen in early December, although he did not believe this would lead to a quick bounce back towards the 200-yen level.
* “I think 180-yen will be the next line of resistance … but that is likely to happen next year,” he said.
* The market is expected to waver around current levels with the approach of the end of the year.
* The cabinet in Thailand, the world’s biggest rubber producer, is due this week to work on drafting a new rubber-buying scheme in a bid to shore up domestic prices that are near five-year lows. [ID:nBKK390644]
* The news has been one of the factors to help lift physical rubber prices recently, Asian traders said.
* “If the (Thai) government fails to do that, the market will drop back,” one Thai trader said.
* Rubber has been under pressure as the global economic crisis erodes global car production, with a Japanese tyremaker industry group saying last week that it expects tyre production to fall 5 percent next year in terms of rubber usage.
* Toyota Motor Corp (7203.T), the world’s biggest automaker, on Monday forecast its first ever group operating loss in the latest news to show the magnitude of the problem faced by the industry as global sales tumbles. [ID:nT299128]
* Rubber’s fate is closely linked with the production of tyres as about 70 percent of world demand for the commodity stems from tyres.
* The U.S. government threw a $17.4 billion lifeline on Friday to Detroit carmakers crippled by the economic recession. [ID:nPEK94492]
* U.S. crude futures CLc1 rose on Monday at one point topping $43 a barrel, lifted by a weaker U.S. dollar and hopes that OPEC members will comply with the latest supply cuts, but gains were limited by concerns about a slowdown in energy demand. [O/R]
PRICES OF ASIAN PHYSICAL RUBBER COMPARED WITH FRIDAY
Grade Price Change
Thai RSS3 (Jan) $1.35/kg +$0.05
Thai RSS3 (Feb) $1.35/kg +$0.05
Thai STR20 (Jan) $1.35/kg +$0.15
Thai STR20 (Feb) $1.35/kg +$0.15
Malaysia SMR20 (Jan) $1.30/kg +$0.13
Malaysia SMR20 (Feb) $1.30/kg +$0.13
Indonesia SIR20 (Jan) $0.59/lb +$0.04
Indonesia SIR20 (Feb) $0.59/lb +$0.04
Thai USS3 40 baht/kg +2 bahts
Thai 60-percent latex (drums, Jan) $1,070/tonne +$70
Thai 60-percent latex (bulk, Jan) $950/tonne +$50
Source: Reuters