BANGKOK, June 1 (Reuters) – Purchases by tyre makers, steady
demand from main consumer China, tight supplies in Southeast Asia
and high oil prices are expected to push up rubber prices in
June, a Reuters poll showed on Monday.
The benchmark rubber contract on the Tokyo Commodity Exchange
, currently November 2009, was forecast at 175.0 yen per
kg by the end of June, according the median forecast of 10
analysts and dealers polled by Reuters.
That was 5.2 percent higher than the previous forecast of
166.3 yen per kg at the start of May.
“I expect basically an upward trend in June, supported by an
improvement in fundamentals,” said a manager at a trading firm in
Tokyo. “Tyre makers have finished inventory adjustments and their
buying is returning. Also, physical supply is seasonally tight.”
Tokyo’s November contract added 2.4 yen per kg at 171.7 yen,
having hit an intraday high of 172.3 yen, its strongest since
mid-May as crude oil struck another seven-month high. [O/R]
Unseasonal rains have disrupted tapping in some rubber
growing areas in Thailand, the world’s biggest producer but
supply was expected to improve in July, dealers said.
Tyre makers, such as Bridgestone <5108.T>, Goodyear
and Michelin , are chasing forward shipments, while
China is still around to buy tyre grades from Thailand, Indonesia
and Malaysia, they said.
“China has been buying and I expect demand should remain firm
for the whole year,” said a dealer in Malaysia.
China, the world’s biggest rubber importer, has been a bright
spot for an otherwise gloomy global auto industry.
China’s passenger car sales in April rose 37.4 percent from a
year earlier to a record high, the country’s official industry
association said on Friday, bolstered by government stimulus
measures. [ID:nSHA371469]
General Motors Corp expects its sales in China, which
has overtaken the United States as the world’s largest auto
market, to grow 5 to 10 percent this year. [ID:nSHA355414]
TOCOM rubber was also expected to get support from rising
prices for oil, which is used to make synthetic rubber. A rise in
oil prices usually encourages users to shift to natural rubber.
“The market will likely test the 180 yen level in coming
weeks,” said a manager at a Japanese commodity brokerage,
referring to a level last seen in November.
“A driver for that rally would be a series of buy-backs by
those who had sold futures on bearish views on the demand side.
Now that any price falls invited buying by major tyre makers in
the physical market, such bearish views look no longer feasible.”

SOFTER PRICES IN JULY
But rubber supplies from Thailand and Malaysia were expected
to rise gradually in July as the rains ease, putting pressure on
Tokyo futures, dealers said.
“Supply should be okay in July and we should see a drop in
both futures and physical prices,” a trader at Thailand’s Hat Yai
rubber centre said.
The benchmark TOCOM rubber price could fall to 168.8 yen per
kg by end-July, according to the poll.
On the physical front, Thai RSS3 was forecast to slip to
$1.70 a kg by the end of July from $1.75 by the end of June.
Malaysia’s SMR20 could fall to $1.60 a kg and Indonesia’s SIR20
to $1.53 by the end of next month.

Forecasts for TOCOM sixth-month rubber prices in yen per kg:
end-June end-July
Median 175.0 168.8
Lowest 140.0 140.0
Highest 193.0 186.0
1. Unattributable 175-185 170-180
2. Unattributable 1.80 1.60
3. Unattributable 1.83 1.86
4. Unattributable 150-170 140-150
5. Supara Rubber 160 160-165
6. A.T.S. Rubber 165-175 165-175
7. Unattributable 180 170
8. Thai Rubber Latex 140-170 140-170
9. D.S. Futures 193 175
10. Unattributable 160-175 160-175

Forecasts for Thai RSS3 in U.S. dollar per kg:
end-June end-July
Median 1.75 1.70
Lowest 1.60 1.50
Highest 1.85 1.80
1. Unattributable 1.80-1.85 1.75-1.80
2. Unattributable 1.60 1.50
3. Supara Rubber 1.80 1.80
4. A.T.S. Rubber 1.65-1.70 1.65-1.70
5. Unattributable 1.80 1.70
6. Unattributable 1.65-1.75 1.65-1.75

Forecasts for Thai STR20 in U.S. dollar per kg:
end-June end-July
Median 1.65 1.60
Lowest 1.55 1.50
Highest 1.75 1.75
1. Unattributable 1.70-1.75 1.70
2. Unattributable 1.55 1.50
3. Supara Rubber 1.70 1.70-1.75
4. Unattributable 1.60 1.60
5. Unattributable 1.70 1.60
6. Unattributable 1.55-1.65 1.55-1.65

Forecasts for Malaysia SMR20 in U.S. dollar per kg:
end-June end-July
Median 1.65 1.60
Lowest 1.55 1.50
Highest 1.75 1.75
1. Unattributable 1.70-1.75 1.70
2. Unattributable 1.55 1.50
3. Supara Rubber 1.70 1.70-1.75
4. Unattributable 1.60 1.60
5. Unattributable 1.70 1.60
6. Unattributable 1.55-1.65 1.55-1.65

Forecasts for Indonesia SIR20 in U.S. dollar per kg:
end-June end-July
Median 1.55 1.53
Lowest 1.50 1.40
Highest 1.65 1.63
1. Unattributable 1.60-1.65 1.63
2. Unattributable 1.45 1.40
3. Supara Rubber 1.54 1.60
4. Unattributable 1.50 1.50
5. Unattributable 1.60 1.50
6. Unattributable 1.50-1.60 1.50-1.60

Source: Reuters

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