Rubber jumps to Four-Month High as Top Producers cut shipments

Rubber Oct 02, 2012 No Comments

Rubber tireMarch-delivery rubber rose 4.6 percent to end at 272.5 yen a kilogram ($3,490 a metric ton) on the Tokyo Commodity Exchange, the highest settlement for the most active contract since May 30. Futures have gained 2.7 percent this year.

Rubber jumped to a four-month high, erasing this year’s losses, after the world’s largest producers began cutting exports by the most since 2009, reducing supplies.

Thailand, Indonesia and Malaysia, representing 70 percent of global rubber output, agreed to cut shipments by 300,000 tons, starting October 1st. That’s as much as China, the biggest user, imports in about five weeks and exceeds the 2013 surplus forecast by the International Rubber Study Group. Rubber futures in Tokyo will advance to 300 yen by the year-end, according to the median of 12 analyst estimates compiled by Bloomberg.

“Coordinated actions from three countries have shown signs that supply will be limited,” Ker Chung Yang, an analyst at Phillip Futures Pte, said by phone from Singapore. The bullish trend will probably continue when Chinese markets reopen, he added. The Shanghai Futures Exchange is closed this week for the National Day holiday.

ThailandIndonesia and Malaysia also had considered introducing a minimum price to avert further rubber price decline.

via Rubber Climbs to Four-Month High as Top Shippers Reduce Cargoes – Bloomberg.

Rod Sherkin

Rod is a former senior executive, responsible for Purchasing, for both Pillsbury and Ball Packaging back in the 80’s and 90’s. Since then, he has continued to work in the Purchasing field as both a consultant and founder of the website Propurchaser.com.

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