Japan dampens Asian rubber mart<\/p>\n
SINGAPORE (Reuters): Worries over post-election
\nJapan and continued weakness in regional currencies are set to
\nsend more shivers through Southeast Asia's dull rubber market
\nthis week, regional traders said yesterday.<\/p>\n
\"There has been very little physical trade recently. People
\nare only checking prices,\" said one Singapore trader.
\n\"They may even stop asking if Japan's economic outlook remains so
\nbearish. There is no good news at all and most people are very
\npessimistic,\" the trader said.<\/p>\n
The dollar rose above 144 yen in early Tokyo trade on Monday
\namid political uncertainty in Japan after the ruling Liberal
\nDemocratic Party suffered a major setback in Upper House
\nelections.<\/p>\n
Hopes that the International Natural Rubber Organization
\n(INRO) would buy up the market have faded with rubber prices
\nposting minor gains last week as regional currencies weakened
\nagainst the dollar, traders said.<\/p>\n
\"It's currency movements, not demand, that supported rubber
\nprices,\" another Singapore trader said.<\/p>\n
INRO groups major rubber producers and consumers. Under INRO
\nrules, the buffer stock manager may buy rubber when the group's
\nfive-day moving average price falls to 183 Malaysian\/Singapore
\ncents a kg. He must buy at 172.<\/p>\n
The average price was 190.54 cents on July 9, compared with
\njust above 183 in late June.<\/p>\n
\"It doesn't look like we will see the may-buy level soon,\"
\nsaid the second trader.<\/p>\n
In Thailand, prices ended a week slightly higher after the
\nThai baht eased against the dollar.<\/p>\n
China agreed to buy 5,000 tons of rubber from the Thai
\ngovernment stockpile of around 50,000 tons at $632 per ton, and
\ntraders saw some moderate demand.<\/p>\n
However, news that Japan's May rubber output for tires dropped
\nby 2.4 percent year-on-year weighed on sentiment.<\/p>\n
The Japan Automobile Tire Manufacturers' Association said on
\nFriday that the country's rubber output for tires totaled 84,427
\ntonnes in May, representing a 2.4-percent drop.<\/p>\n
Output<\/p>\n
In the first five months of this year, rubber output for tires
\ntotaled 444,860 tonnes, down 1.2 percent from the corresponding
\nperiod a year ago.<\/p>\n
In light of weak domestic demand, Japanese trading firms
\ncontinued to cut rubber imports.<\/p>\n
\"News from rubber output for tires and the bearish outlook of
\nlocal and regional automobile industry do not bode well for
\nmarket sentiment here,\" said a Hat Yai trader.<\/p>\n
Thai RSS3 for October shipments was quoted at 73 U.S. cents
\nper kg on FOB basis at the end of last week. November and
\nDecember were quoted at 74 and 75 cents a kg respectively.<\/p>\n
A weaker Malaysian ringgit also supported rubber levels, but
\ndemand from overseas consumers remained poor, partly because of
\ncheaper rubber offered in Indonesia, traders said.<\/p>\n
\"The market has been driven by currency as there were no other
\nfactors. I expect this to continue,\" said a local trader.<\/p>\n
At the end of last week, the ringgit sank to a five-month low
\nof 4.2750 to the dollar against around 4.1400 a week earlier.
\nOn Friday, the Malaysian Rubber Board quoted August RSS1 buyer at
\n289.50 Malaysian cents (68 U.S. cents) a kg, up 5.50 cents for
\nthe week.<\/p>\n
August SMR 20 buyer was one cent higher at 257 cents a kg.<\/p>\n
Prices of tire-grade SIR20 in Indonesia are expected to stay
\nstable this week, with demand remained thin despite lower levels
\nthere than in other rubber-producing countries.<\/p>\n
\"We expect the market to be stable because the rupiah is
\nrelatively steady at around 15,000 against the U.S. dollar.
\nBuyers are also sniffing for prices,\" said one Jakarta-based
\ntrader.<\/p>\n
September rubber finished the week at 27.25 U.S. cents\/lb fob
\nMedan, 27.00 fob Palembang and Surabaya and 26.75 fob Pontianak
\nand Jambi.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/japan-dampens-asian-rubber-mart-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}