High NR Prices Being on the Wave of Strong Fundamental Factors

Current supply tightness of natural rubber (NR) in both producing and consuming countries still lends support for NR prices to stay on an upward trend whereas a continued weakening greenback against the Japanese yen, the euro, Thai baht, Malaysian ringgit, and Indonesian rupiah is attracting commodity speculators to push up commodity prices higher, including rubber futures beyond the fundamentals of market forces.

DESCRIPTION	22 OCT	25 OCT	26 OCT	CHANGE **		% CHANGE	UNIT
IRCo's DCP	394.96	397.90	400.40	5.44		1.38%	US cents/kg
TOCOM/RSS3 *
- Oct. 10	322.00	328.40	328.00	6.00		1.86%	Yen/kg
- Mar. 11	333.80	337.50	340.30	6.50		1.95%	Yen/kg
SHFE/RSS3 ***	31,390	32,360	32,855	1,465		4.67%	Yuan/ton
SICOM/RSS3
- Nov. 10	398.50	404.50	404.00	5.50		1.38%	US cents/kg
- Oct. 11	402.00	408.50	411.00	9.00		2.24%	US cents/kg
SICOM/STR20
- Nov. 10	392.10	398.00	399.50	7.40		1.89%	US cents/kg
- Oct. 11	392.00	396.90	397.00	5.00		1.28%	US cents/kg
AFET/RSS3
- Nov. 10	118.25	-	119.50	1.25		1.06%	THB/kg
- May 11	119.20	-	122.20	3.00		2.52%	THB/kg
RRIT ****
- RSS3	120.30	-	120.50	0.20		0.17%	THB/kg
- STR20	118.75	-	118.95	0.20		0.17%	THB/kg
SIR20 *****	392.00	397.00	399.00	7.00		1.79%	US cents/kg
SMR20 *****	393.00	402.00	401.00	8.00		2.04%	US cents/kg
Source: IRCo Note: * Day session         ** Change between 15 Oct. and 19 Oct.             *** The highest daily trading volume was Mar. 2011      **** RRIT means Rubber Research Institute of Thailand     ***** Offer, f.o.b., Asian physical rubber prices for Nov./Dec. delivery, Dow Jones             - Closed for Public Holiday

Consequently, we have seen so many new highs on commodity prices almost every day. The failure of the latest G-20 Finance Ministers’ meeting last weekend to stop competitive devaluation of currencies signaled that commodity prices will be likely to go higher if the White House doesn’t try to stop weakening the greenback.

On the rubber market, rubber futures fluctuated widely from last Friday to this Tuesday. Tokyo and Shanghai rubber futures fell last Friday from a day earlier and jumped up consecutively on Monday and Tuesday, but physical prices climbed up during that period. A situation like this is expected to linger on in the coming weeks.

(irco.biz)