Asian Rubber Settles Lower; Producers Hold Back But Majors Buy
17 March 2014, 18:08 SEAST
Asian rubber settled mostly lower Monday after high stockpiles in China and Japan led to negative sentiment.
Benchmark August natural rubber on the Tokyo Commodity Exchange settled 2.5% lower at Y234.3 a kilogram. An excessively dry wintering season this year is hitting production in Thailand, Indonesia and Malaysia, with a possibility of a decline by 6%-8% this year, said the International Rubber Consortium, or IRCo, in a statement on its website.
The Association of Natural Rubber Producing Countries meanwhile forecast a 6.7% increase in Malaysia’s annual production, while February production in all three International Tripartite Rubber Council countries also increased. The association did not provide 2014 forecast for the annual output from Thailand and Indonesia.
IRCo added in the statement that it is setting up a committee to boost consumption of natural rubber. It will also work with the ANRPC to “address the issue of statistical discrepancies,” the group added.
August Tocom rubber closed flat at Y234.3/kg in the night session, which is considered part of the next trading day.
Benchmark September natural rubber on the Shanghai Futures Exchange settled 2.0% lower.
Physical rubber prices were also lower, with most producers unwilling to sell because prices are too low during the wintering season, said a Singapore-based dealer. However tire majors like Bridgestone were busy bargain-hunting as they sought cheap rubber from dealers, he added.