Asian rubber futures settled mixed Monday as supply concerns supported the Thai and Singapore bourses, while Beijing's latest increase in banks' reserve requirement ratio weighed on the Shanghai Futures Exchange.
In Thailand, natural rubber futures on the Agricultural Exchange of Thailand settled at the daily limit-up level for the fourth straight trading day. Physical unsmoked sheet grade-3, the raw material, also rose sharply to THB146.29-THB155.2 a kilogram at the three central markets Monday--far above the THB120/kg floor rate set by the Thai government last week.
With prices breaching THB120/kg, intervention moves such as export suspension, as well as a meeting planned earlier by the International Rubber Consortium to discuss measures supporting natural rubber prices, are now on hold, IRCo acting chief executive Yium Tavarolit said Monday.
"Because natural rubber prices have breached the floor rate of THB120/kg (stipulated by the Thai government), that meeting is now not needed for the time being," the Bangkok-based Yium said after a Thai national rubber committee meeting on Monday afternoon.
Natural rubber prices had fallen sharply in the last few weeks due to the combined effects of geopolitical tensions in the Middle East, tightening fears in China and the massive earthquake in Japan, after reaching record highs in several markets in February.
Prices started rebounding strongly on Wednesday due to supply fears after major producers Thailand and Indonesia both set floor rates for natural rubber prices.
The Thai government and IRCo will continue to monitor natural rubber prices closely, and if they fall below the floor rate again, possible measures mentioned last week such as a suspension of exports would be considered again, Yium said.
The bellwether Tokyo Commodity Exchange was closed for a public holiday Monday. When it reopens Tuesday, the upward pressure from supply concerns that has been supporting the market recently may be reduced by the news that the producers meeting has been called off, traders said.
Even without direct Thai government intervention, rubber prices will likely be supported, as the authorities have shown that they will take definitive steps to support prices should the need arise, a Thai trader said.
Major producing countries have also entered the low production season and raw material is scarce, said traders. In Thailand, physical traders weren't offering actively Monday.
"We got less than 10 tons of raw material today. We can't offer and haven't been for the last few working days," said one major exporter.
A Singapore-based dealer said Thai exporters may have sold more than they should have when prices fell sharply earlier, and were reassessing the situation as prices have rebounded strongly in the last week.
Meanwhile, although the IRCo meeting was called off, Thailand plans to establish a committee to study global rubber prices and come up with a strategy in one month to try to shore up prices when they fall, Deputy Agriculture and Cooperatives Minister Supachai Phosu said Monday.
Thailand will work with Indonesia to evaluate their strategies, he told reporters. Indonesia and Thailand are the world's two largest natural rubber producers and exporters.
However, Supachai forecast that the price of rubber will exceed THB200/kg once the situation in Japan improves.
(Source: http://www.irco.biz/BlogMoreDetial.php?id=2740&ShowContent=news)
Posts
0 comments