This entry was posted on Friday, October 15th, 2010 at 4:25 pm and is filed under Rubber News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
Oct. 15 (Bloomberg) — Rubber in Tokyo climbed to a 27- month high as wet weather cut supplies from Asian producers, while growing car sales in China and India boosted demand.
Source: Bloomberg
The most-active contract on the Tokyo Commodity Exchange gained as much as 1.3 percent to 343 yen per kilogram ($4,212 a metric ton), the highest level since July 2008, before settling at 340 yen. The price had the best weekly performance since May.
Natural-rubber imports by China, the world’s largest user, jumped 19 percent from a month ago to 190,000 tons in September as the nation’s passenger-car sales to dealerships quickened last month from August on additional incentives. Sales in India rose to 169,082 units in September from 129,684 a year earlier, according to the Society of Indian Automobile Manufacturers.
“Car sales are growing so rapidly in the emerging markets that demand for natural rubber from tire makers is getting stronger,” Takaki Shigemoto, an analyst at JSC Corp. in Tokyo, said today by phone. “Suppliers may not be able to catch up with growing demand as weather constrains output.”
Heavier-than-usual rains in Southeast Asia and China have curbed output. Cash prices in Thailand advanced 1.3 percent today to 120.05 baht ($3.97) per kilogram boosted by demand from local and overseas buyers and limited supply after heavy rains, according to the Rubber Research Institute of Thailand.
A severe drought in Yunnan at the beginning of this year and the recent torrential rain in Hainan, the top two producing areas in China, will reduce domestic rubber output, according to Guo Cheng, an analyst at Yongan Futures Co.
Hainan Floods
Flooding forced the evacuation of 440,000 people and destroyed 3,000 houses in Hainan, Xinhua News Agency reported Oct. 12, citing Governor Luo Baoming. A total of 166,700 hectares (411,925 acres) of crops have been damaged, including 74,000 hectares destroyed, the news agency said.
“Demand continues to expand with car sales in China remaining strong, while supply is below normal,” Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co., said by phone from Bangkok. “Fundamental factors remain supportive for the price to rise further,” she said.
March-delivery rubber on the Shanghai Futures Exchange surged as much as 1.5 percent to a record 32,055 yuan ($4,784) a ton before closing at 32,040 yuan.
Rubber inventories in China climbed 5,320 tons to 36,900 tons, the Shanghai bourse said Oct. 8, based on a survey of 10 warehouses. That’s 76 percent lower than this year’s high of 151,832 tons on Jan. 21.