TOCOM slips to two-week low

Benchmark TOCOM rubber futures slipped to a two-week low on Tuesday, retreating after a small gain in the previous session on the back of firm oil prices.

FUNDAMENTALS

* The Tokyo Commodity Exchange rubber contract for January delivery touched a two-week low of 202.3 yen, before partly recovering to be down 0.3 percent at 205.0 yen ($1.86) per kg by 0025 GMT.

* For the top stories in the rubber market and other news, click or

MARKET NEWS

* Oil prices rose to two-month highs on Monday, ending the strongest month of the year for crude futures, boosted in part by expectations of U.S. sanctions against Venezuela's oil sector and as supply concerns have waned in recent weeks.

* The U.S. dollar was quoted around 110.33 yen, compared with around 110.57 yen on Monday afternoon.

* Japan's benchmark Nikkei stock average was little changed.

* The price of copper hit a two-year peak on Monday on upbeat manufacturing data in top consumer China, while nickel hit a near four-month high on renewed supply worries and soaring steel prices.

TOCOM ends higher on firmer oil

TOKYO (July 31): Benchmark Tokyo rubber futures closed up 0.6% on Monday on the back of gains in oil prices to a two-month high.

Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, gained after touching a near two-week low in the night session.

"Tokyo markets were little changed as only a small number of players were trading," said a Tokyo-based broker.

The Tokyo Commodity Exchange rubber contract for January delivery finished 1.2 yen higher at 205.7 yen (US$1.86) per kg.

The most-active rubber contract on the Shanghai futures exchange for January delivery fell 340 yuan to finish at 15,325 yuan (US$2,279) per tonne.

Shanghai futures came under pressure from a massive interest among participants to roll over positions to the new benchmark January contract, the broker said.

The front-month rubber contract on Singapore's SICOM exchange for August delivery last traded at 140.7 US cents per kg, down 0.9 US cent.

Tokyo futures gain on firm oil prices

TOKYO, July 31 (Reuters) - Benchmark TOCOM rubber futures rose on Monday after touching their lowest in nearly two weeks in the night session, buoyed by firm oil prices.

FUNDAMENTALS

* The Tokyo Commodity Exchange rubber contract for January delivery had climbed 1.5 yen to 206 yen ($1.87) per kg by 0039 GMT, after touching 203 yen in the night session, its lowest since July 19.

* Rubber inventories in warehouses monitored by the Shanghai Futures Exchange grew 0.8 percent from the previous week, the bourse said on Friday.

* For the top stories in the rubber market and other news, click or

MARKET NEWS

* Oil prices rose to their highest levels since May early on Monday as a dip in U.S. output tightened the market and the threat of sanctions against Venezuela kept traders on edge.

* The U.S. dollar was quoted around 110.53 yen, compared with around 111.07 yen on Friday afternoon.

* Japan's benchmark Nikkei stock average was little changed.

* Nickel prices hit a 3-1/2 month peak on Friday as investors shifted from zinc after a build-up in zinc inventories indicated that shortages had eased

TOCOM ends higher on short-covering; stronger yen caps gains

TOKYO (July 27): Benchmark Tokyo rubber futures erased earlier losses to end higher on Thursday, as investors unwound their short positions in late session while a stronger yen against the dollar and weaker Shanghai futures capped gains.

"There were no fresh news, but some technical traders initially tried to push prices down, but decided to unwind positions later as the market did not fall as much as they wanted," a Tokyo-based dealer said.

The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery finished 0.3 yen higher at 214.5 yen (US$1.93) per kg, after diving to a low of 211.2 yen earlier in the session.

The most-active rubber contract on the Shanghai futures exchange for January delivery fell 100 yuan to finish at 16,115 yuan (US$2,392) per tonne.

The dollar slipped 0.2% to 110.90 yen on Thursday, edging near 110.625, its 5½-week low touched on Monday.

A stronger yen makes yen-denominated assets less affordable when purchased in other currencies.

"As many rubber dealers and traders across Asia were away for Indonesia where a local industry body is holding an annual event, trades were quiet and trading is expected to be thin on Friday," the dealer said.

The front-month rubber contract on Singapore's SICOM exchange for August delivery last traded at 148.5 US cents per kg, down 1.1 US cents.

Tokyo futures drop after overnight slide in Shanghai prices

TOKYO, July 27 (Reuters) - Benchmark TOCOM rubber futures dropped on Thursday, weighed down by an overnight slide in Shanghai futures and a firmer yen against the U.S. dollar.

FUNDAMENTALS

* The Tokyo Commodity Exchange (TOCOM) rubber contract for January delivery was down 1.4 yen, or 0.7 percent, at 212.8 yen ($1.92) per kg as of 0034 GMT, after falling 1.7 percent the previous day.

* The most-active rubber contract on the Shanghai Futures Exchange for January delivery rose nearly 300 yuan overnight to 15,920 yuan ($2,357) per tonne.

* The Federal Reserve kept interest rates unchanged on Wednesday and said it expected to start winding down its massive holdings of bonds "relatively soon" in a sign of confidence in the U.S. economy.

MARKET NEWS

* The U.S. dollar dropped 0.6 percent to 111.21 yen after the release of the Fed's policy statement. It was quoted around 111.08 yen early on Thursday.

* Japan's benchmark Nikkei stock average was down 0.2 percent, dragged down by a stronger yen.

* Oil prices rose to near eight-week highs on Wednesday, with Brent crude futures above $50 a barrel, as a much steeper than expected decline in U.S. inventories encouraged hopes the global crude glut would recede.

TOCOM bounces back on firm oil prices, softer yen

Benchmark Tokyo rubber futures rose on Tuesday, bouncing back from the previous session's plunge, as firmer oil prices and a softer yen against the dollar lent support.

Oil prices extended gains on Tuesday after OPEC moved to cap Nigerian oil output and Saudi Arabia pledged to limit exports next month to help rein in global oversupply.

Against the yen, the dollar eased slightly to 111 yen on Tuesday, having slipped as low as 110.625 yen, its lowest since mid-June, the previous day, as investors positioned for a Federal Reserve meeting starting later in the day.

"Rubber prices got a boost from stronger oil prices and the yen's drop," said Hiroyuki Kikukawa, general manager of research, Nissan Securities.

The Tokyo Commodity Exchange (TOCOM) rubber contract for December delivery ended up 2.2 yen, or 1.1 percent, at 211.5 yen ($1.9) per kg. The TOCOM July contract expired on Tuesday.

"Since rubber prices began climbing sharply last summer, investors are reluctant to increase short positions, but there are no strong incentives to buy either," Kikukawa said.

Investors' focus will be on an economic policy by China, the world's biggest rubber consumer, ahead of and after this year's Communist Party Congress, he added.

The most-active rubber contract on the Shanghai futures exchange for September delivery fell 25 yuan to finish at 13,640 yuan ($2,020) per tonne.

The front-month rubber contract on Singapore's SICOM exchange for August delivery last traded at 152.5 U.S. cents per kg, up 0.4 cent

Natural Rubber in Demand as Oil Rises

The price of rubber rebounded on Tuesday morning (25/07), in line with the strengthening of crude oil prices. The rubber price (December 2017 delivery, the most-active contract on the Tokyo Commodity Exchange), had risen 2.05 percent to 213.60 yen per kilogram (kg) by 10:05 am local Jakarta time, while earlier this morning, rubber prices had in fact fallen 0.62 percent directly after the opening of trade.

Rubber prices are currently being supported by strengthening crude oil prices after giant oil producer and OPEC member Saudi Arabia pledged to reduce exports in August to help curtail the global crude oil excess.

Saudi Arabia Energy Minister Khalid al-Falih said his country will limit crude exports by 6.6 million barrels per day (bpd) in August, or nearly 1 million bpd below last year's level. Meanwhile, Russian Energy Minister Alexander Novak stated that an additional 200,000 barrels per day of crude oil could be removed from the market if compliance with a global deal to cut output was 100 percent.

Gu Jiong, analyst at Yutaka Shoji, said investors are starting to buy back (natural) rubber as crude oil prices rise.

There are two types of rubber: (1) natural rubber and (2) synthetic rubber. Natural rubber is made from the juice (latex) of the rubber tree, whereas the synthetic type is made from petroleum. Hence when crude oil prices rise investors tend to switch to natural rubber. This is possible because both rubber types are interchangeable.

Meanwhile, Japan's yen pulled back from a five-week high versus the US dollar on Tuesday morning. A weaker yen tends to support rubber prices.

Tokyo futures rise on weaker yen

TOKYO, July 25 (Reuters) - Benchmark TOCOM rubber futures rose on Tuesday, supported by a weakening in the yen against U.S. dollar, but trades were thin as investors were mostly making position adjustments ahead of the nearest term contract's expiry.

FUNDAMENTALS

* The Tokyo Commodity Exchange (TOCOM) rubber contract for December delivery was up 1.3 yen, or 0.6 percent, at 210.6 yen per kg as of 0047 GMT, after falling more than two percent the previous day.

* The TOCOM July contract is due to expire on Tuesday.

* China's imports of natural rubber rose 30.48 percent from a year earlier in June, according to the country's customs data.

* China's economy is likely to grow at an annual rate of around 6.7 percent in the second half of 2017, slowing slightly from the first half of the year, the State Information Center (SIC) said on Tuesday.

MARKET NEWS

* The U.S. dollar rose 0.15 percent to 111.29 yen early on Tuesday, after touching a six-week low on Monday, as investors braced for news from this week's U.S. central bank meeting. A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.

* Japan's benchmark Nikkei stock average inched higher on Tuesday after the U.S. Nasdaq hit a record high the previous day.

* Oil rose more than 1 percent on Monday, after leading OPEC producer Saudi Arabia pledged to cut exports in August to help reduce the global crude glut, and Halliburton Co's executive chairman said the U.S. shale drilling boom would probably ease next year.

IMF cuts 2017 growth forecasts for UK and US

The International Monetary Fund has cut its growth forecast for the UK economy this year after a weak performance in the first three months of 2017.

In its first downgrade for the UK since the EU referendum in June last year, the IMF said it expected the British economy to expand by 1.7% this year, 0.3 points lower than when it last made predictions in April.

The Fund raised its forecasts for the UK after the Brexit vote as a result of the much stronger than envisaged activity in the second half of 2016. In October 2016, it pencilled in growth of 1.1% for 2017, raising this forecast to 1.5% in January this year and to 2% in April.

Maurice Obstfeld, the IMF’s economic counsellor, pointed to a marked change in early 2017. He said the UK’s growth forecast had been lowered based on its “tepid performance” so far this year, adding: “The ultimate impact of Brexit on the United Kingdom remains unclear.”The IMF left its growth forecast for the UK in 2018 unchanged at 1.5% but said one key risk facing the global economy was that the Brexit talks would end in failure.It contrasted its gloomier outlook for the UK with a rosier forecast for the rest of the EU, with 2017 growth upgrades for the four biggest eurozone countries – Germany, France, Italy and Spain.

Germany has been revised up by 0.2 points to 1.8%, France by 0.1 points to 1.5%, while Italy and Spain have both been revised up by 0.5 points to 1.3% and 3.1% respectively.The Fund produces a world economic outlook in April and October to coincide with its spring and annual meetings, but provides updates in January and July.

Launching the report in Kuala Lumpur, Obstfeld said the IMF had left its global growth forecasts unchanged at 3.5% in 2017 and 3.6% for next year, noting that the stronger performance by the eurozone, China and Japan had been offset by weaker performances elsewhere.

“The recovery in global growth that we projected in April is on a firmer footing; there is now no question mark over the world economy’s gain in momentum,” Obstfeld said.

He added that Donald Trump’s failure so far to push through his promised package of tax cuts had dampened US growth prospects.

“From a global growth perspective, the most important downgrade is the United States,” he said. “Over the next two years, US growth should remain above its longer-run potential growth rate. But we have reduced our forecasts for both 2017 and 2018 to 2.1% because near-term US fiscal policy looks less likely to be expansionary than we believed in April.”

Three months ago, the IMF said it expected growth in the world’s biggest economy to be 2.3% this year and 2.5% next.

The Fund said that while the risk of a repeat of the electoral shocks of 2016 – Brexit and Trump’s presidential victory – had declined, policy uncertainty remained at a high level and could rise further. It singled out “difficult-to-predict US regulatory and fiscal policies, negotiations of post-Brexit arrangements, or geopolitical risks”, all of which it said could harm confidence, deter private investment, and weaken growth.

TOCOM follows Shanghai lower after 2-day rally

Benchmark Tokyo rubber futures ended down 0.8 percent on Friday as weak Shanghai futures prompted market participants to book profits from a two-day rally to near two-month highs, brokers said.

Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, gained 6.5 percent in the previous two sessions.

The Tokyo Commodity Exchange rubber contract for December delivery finished 1.7 yen lower at 214.5 yen ($1.92) per kg. It had hit a near two-month high of 218 yen on Thursday.

For the week, the contract gained 6.4 percent.

The most-active rubber contract on the Shanghai futures exchange for September delivery fell 125 yuan to finish at 13,970 yuan ($2,065) per tonne.

Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.5 percent from last Friday, the exchange said on Friday.

The front-month rubber contract on Singapore's SICOM exchange for August delivery last traded at 156 U.S. cents per kg, down 1.3 cents

Qingdao Bonded Warehouse Rubber Stock dated 15 JUL 2017

Qingdao Bonded Zone rubber stocks continued to decline to 258,900 tons, compared with July 10 270,800 tons to reduce 11,900 tons, down 4.39%. Of which natural rubber 201,400 tons, compared with July 10 to reduce the 6,700 tons, down 3.22%; synthetic rubber 53,200 tons, compared with July 10 to reduce the 5,200 tons, down 8.9%; compound rubber steady at 40,300 tons

SHFE: Natural rubber futures warehouse reported 348440 tons (dated 21 JUL), compared with the previous day to increase 5400 tons.

TOCOM hits near 2-month high on bullish Shanghai

TOKYO (July 20): Benchmark Tokyo rubber futures hit their highest in nearly two months on Thursday as extended gains in Shanghai futures supported the market.

Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, have gained 6.5% in the past two sessions.

"TOCOM has been pulled higher by extended gains in Shanghai," a Tokyo-based broker said. "It looks as though all TOCOM investors were flocking to rubber, considering a lack of liquidity for other products."

The Tokyo Commodity Exchange rubber contract for December delivery finished 8.5 yen higher at 216.2 yen (US$1.93) per kg after hitting 218 yen earlier, the highest since May 26.

Rubber inventories at TOCOM warehouses stood at 3,354 tonnes as of July 10, up from 2,804 tonnes on June 30, according to the bourse. The stock level has been recovering since hitting its lowest since 2010 earlier this year.

The most-active rubber contract on the Shanghai Futures Exchange for September delivery rose 355 yuan to finish at 14,035 yuan (US$2,074) per tonne.

The front-month rubber contract on Singapore's SICOM exchange for August delivery last traded at 157.5 US cents per kg, up 0.8 US cent.

Rubber Price Up 2% Morning 20 JUL 2017

Rubber prices continue to strengthen in early trading today, Thursday (20/7/2017), following reports of rising car sales in China.

The price of rubber for December 2017 delivery, the most-active contract on the Tokyo Commodity Exchange (Tocom), climbed 1.97 percent or 4.10 points to 211.80 yen per kilogram (kg) at 07.37 pm.

Earlier this morning, the price of the rubber opened with a 0.67% rise or 1.40 points at 209.10 position, after on Wednesday (19/7) closed 3.08% or 6.20 points at 207.70.

Yutaka Shoji analyst Gu Jiong said higher car sales in China boosted expectations of growing rubber imports. "As a result of commodity prices are strengthened," said Gu Jiong, as quoted from Bloomberg.

Car sales in China rose 4.6% in June 2017 (y-o-y), while vehicle production in China rose 3.9% from the previous month (m-o-m).

In addition, prices are driven by the decline in rubber stocks in the Port of Qingdao. Total rubber reserves on July 7, 2017 fell 4.1% to 208,100 tons from the previous week.

Meanwhile, Chairman of Indonesian Rubber Companies Association (Gapkindo) Moenardji Soedargo said the reduction of exports is not a solution to boost the price of falling rubber.

As is known, several times representatives from Thailand, Malaysia, and Indonesia will discuss ways to raise the price of rubber, one of them by reducing the volume of exports. The three countries account for 60% of global natural rubber supplies.

According to Moenardji, fundamentally the natural rubber market is in healthy condition. Even this year there is a possibility of deficit.

The strengthening of rubber prices can continue for the second day although at the same time the performance of currency continues to appreciate. The yen today tracked up 0.13% or 0.14 points to 111.83 yen per US dollar at 07.43 pm, after yesterday ended up appreciating 0.09% at 111.97.

Cambodia Natural rubber exports double

The volume of Cambodia’s rubber exports doubled in the first half of 2017, while the land area of rubber plantations also rose by 70 percent, according to a Ministry of Agriculture, Forestry, and Fisheries report released this week.

The report showed rubber exports from January to June was 65,556 tonnes, up 197 percent when compared with the same period a year earlier. The number of hectares under cultivation meanwhile rose 11.6 percent to 433,827 hectares.

Total cultivation by June this year also increased by 70 percent to 92,379 tonnes, up from 54,320 in the same period last year, stated the ministry report, with showed the average price for Cambodia’s rubber was $1,450 per tonne in the same period.

Pol Sopha, director-general of the ministry’s general directorate of rubber, said plantations had been harvesting a large amount of rubber, expressing optimism for the expansion of the industry.

“If the price keeps stable, we believe the land area of rubber plantations will continue to increase because rubber is still a strategic crop,” Mr Sopha said.

According to Mr Sopha, Vietnam, Malaysia and China are Cambodia’s main rubber markets.

Global economy issues including crude oil prices, fluctuating currency exchange rates, and the price of other commodities on the markets will likely drag down the global rubber price in years to come, he added.

Agriculture Minister Veng Sakhon said last week that from 2018 to 2022, rubber supply would rise by more than demand, which would also push the price down.

However, he said from 2023, the price would rise again as demand overtakes supply.

Lim Heng, vice president of An Mady Group Co, welcomed the prospect of stable rubber prices this year and next, but called on government to consider reducing tax on rubber exports, to boost domestic investment.

“The rubber price is currently positive and stable because it is related to oil prices,” Mr Heng said. “But we want the government to consider reducing tax for rubber exports when the global price goes down, to help local investment compete with others in the market.”

While trying to expand into international markets, especially China, which is the world’s biggest rubber importer, the Cambodian government is also working to establish domestic factories for rubber products to create jobs, Mr Sopha said.

TOCOM hits 1-1/2-month high on firm Shanghai

Benchmark Tokyo rubber futures ended up 3.1 percent on Wednesday after hitting their highest in one-and-a-half months in late trading on the back of firm Shanghai futures.

"The strong buying in Shanghai futures supported TOCOM, and vice versa," said a Tokyo-based broker. "The buying was more to do with technical position adjustments rather than shortage of supplies."

The Tokyo Commodity Exchange rubber contract for December delivery finished 6.2 yen higher at 207.7 yen ($1.85) per kg after touching 208 yen in late trading, the highest since May 31.

The most-active rubber contract on the Shanghai futures exchange for September delivery rose 530 yuan to finish at 14,045 yuan ($2,079) per tonne.

The front-month rubber contract on Singapore's SICOM exchange for August delivery last traded at 155.40 U.S. cents per kg, up 6.7 cents.

Sumitomo Rubber Industries said it is considering tripling tyre production capacity at one of its two factories in China to 60,000 tyres per day to meet growing demand.

Indonesia's rubber association executive Erwin Tunas said the country's 2017 rubber exports were seen at 2.7 million tonnes, compared with 2.63 million tonnes in 2016. He also said that 2017 rubber output was seen at 3.23 million tonnes, compared with 3.16 million tonnes in 2016

Oil prices ease ahead of data that may show rising U.S. inventories

Oil prices pulled back slightly on Wednesday, as investors awaited fresh data on U.S. crude inventories, which was seen to have increased last week.

According to the American Petroleum Institute, U.S. crude supplies grew by 1.6 million barrels in the week ended July 14. If confirmed, it would be first increase after two weeks of decline.

But API projections weren’t all gloomy, as the firm also expects an over 5 million barrel drop in gasoline stockpiles and a 2.9 million barrel decline in distillates stocks. Gasoline demand in the U.S. usually rises during the summer driving season.

The resilience of the U.S. oil industry has been a concern for the Organization of the Petroleum Exporting Countries, the global oil cartel that controls over 40% of the world’s crude oil. For more than three years, the group has been grappling with low prices as global supply outpaced demand.

Accelerating output from the U.S., where producers are improving their efficiency, has made matters worse. In May, daily U.S. crude production averaged 9.32 million barrel, a 6.3% on-year increase while prices have only risen by $0.85, or 1.2%, compared with the same month last year.

OPEC and Russia have teamed up to pare back their production in hopes of lifting prices, but the results have been mixed. Some analysts, such as Goldman Sachs have called the plan “self-defeating” because any price gains from the cuts would only embolden U.S. producers. However, OPEC members such as Kuwait has said they were confident that, by the time the deal expires next March, the global market would revert to balance.

Many traders are looking to demand growth, especially from China, to mop up the excess oil. In June, China again overtook the U.S. as the world’s biggest oil importer.

But the worries is that China’s current massive crude appetite isn’t sustainable. BMI Research expects China’s refining activities to ease in the second half of the year, as the Chinese economy loses steam amid intensifying efforts to curb financial risks.

Apart from Wednesday’s data release from the U.S. Energy Information Administration, market players will also be eyeing the outcome of an OPEC meeting next Monday, when delegates will discuss the addition of two previously exempted OPEC members — Nigeria and Libya — into the production curtailment plan.

Indonesia does not need to re-cut export to boost the price

Indonesia does not need to re-cut export to boost back the price of weak rubber. Because the current price of rubber is not so influenced by the supply side of rubber producing countries.

Chairman of the Indonesian Rubber Companies Association (Gapkindo) Moenardji Soedargo said the current weakening of rubber prices is caused by the accumulation of rubber stocks in major importing countries, such as China. Meanwhile, most of the stocks that accumulate it, or 55 percent are rubber from Thailand.

Moreover, according to him, currently the fundamental condition of the rubber market in healthy condition, in the sense there are deficits on the supply side than demand. Thus, export cuts should not have much effect in fixing rubber prices.

"If we look at the world rubber stocks in May 2017, the ratio of global stock to world consumption per month is only 2.2 months, or better than the previous three months, that is, there is a balance of supply and demand side, So it is not export that must be intervened, "said Moenardji, Wednesday (18/7).

Looking at the condition, he said it is not the right policy if Indonesia continues the rubber export restriction agreement with Thailand and Malaysia which is commonly called Agreed Export Tonnage Scheme (AETS) this year. Although indeed, the implementation of AETS in the last year successfully boosted the price of rubber.

Meanwhile, AETS last year was conducted between March and August, where Indonesia reduced exports by 283.73 thousand tons. That number takes a share of 46.13 percent of the total export cut by three countries by 615 thousand tons.

This affected the price of natural rubber in the figure of US $ 1.96 per kilogram (kg) at the end of last year compared to the initial position of the year at US $ 1.09 per kg.

"But at the moment we are not looking at AETS as a solution for pricing, but it is up to the state, and we think that, in my opinion, the antibiotics will damage the immune system," he said.

Instead of cutting exports, business actors must be ingenious in managing upstream production and managing distribution to major rubber consumers. Thus, there will be no more wasteful stockpiling in ports receiving rubber exports.

"I think there is a shortage of rubber, but rubber stocks are piling up in front of market, of course, the price of rice in Jakarta is depressed, as is the case in China, although the rubber available in the world is still lacking," he said.

The plan, Gapkindo has natural rubber export target of 2.7 million tons in 2017. This figure increased 2.66 percent compared to last year's position of 2.63 million tons.

Meanwhile, Gapkindo also targets the increase of rubber production to 3.23 million tons this year, an increase of 2.27 percent compared to the previous position of 3.15 million tons. This increase in production is due to an increase in the number of replanting

Tokyo futures ease on Indonesia export outlook

Benchmark TOCOM rubber futures edged lower on Wednesday, weighed down by expectations of growing exports of the commodity from key producer Indonesia.

FUNDAMENTALS

* The Tokyo Commodity Exchange rubber contract for December delivery had fallen 0.8 yen to 200.7 yen ($1.79) per kg by 0017 GMT, after earlier touching its lowest since Friday at 200 yen.

* Indonesian rubber association executive Erwin Tunas said the country's 2017 rubber exports were seen at 2.7 million tonnes, compared with 2.63 million tonnes in 2016. He also said that 2017 rubber output was seen at 3.23 million tonnes, against 3.16 million tonnes in 2016.

MARKET NEWS

* Oil prices rose slightly on Tuesday as Saudi exports fell and solid demand soaked up some of what is seen as an oversupplied market, but Ecuador's decision to opt out of an OPEC-led supply reduction pact complicated the outlook.

* The U.S. dollar was quoted around 111.96 yen, compared with around 112.30 yen on Tuesday afternoon.

* Japan's benchmark Nikkei stock average was down 0.1 percent.

* Zinc prices fell back on Tuesday amidst profit-taking and producer selling, but copper and other base metals gained on worries about supply shortages

TOCOM eases on strong yen after hitting 2-wk high

TOKYO, July 18 (Reuters) - Benchmark Tokyo rubber futures ended lower on Tuesday after hitting a two-week high earlier, as the market came under pressure from a stronger yen and weak Shanghai futures, brokers said.

Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, lost early bullish momentum as the U.S. dollar sank to a 10-month low against a basket of major currencies, hobbled by uncertainty over the pace of the Federal Reserve's policy tightening.

The Tokyo Commodity Exchange rubber contract for December delivery finished 0.1 yen lower at 201.5 yen ($1.80) per kg, after hitting 205.4 yen, the highest since July 4.

The most-active rubber contract on the Shanghai futures exchange for September delivery fell 60 yuan to finish at 13,460 yuan ($1,992) per tonne.
The front-month rubber contract on Singapore's SICOM exchange for August delivery last traded at 150.5 U.S. cents per kg, down 0.7 cent

Malaysia, Indonesia, Thailand mull cutting rubber output to stabilise prices

Malaysia, Thailand and Indonesia are considering cutting rubber output from 10% to 15% in order to curb falling prices, said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong.

He said the International Tripartite Rubber Council (ITRC), comprising Malaysia, Indonesia and Thailand, would meet in Bangkok on Sept 15 to discuss measures to stabilise rubber prices.

Citing an example, he said the SMR 20 rubber price in Malaysia dropped from RM957.23 per kg in January to RM626.65 per kg in July this year.

“The fluctuation of rubber prices was due to declining demand for the commodity, especially from China, the world’s largest rubber consumer. Therefore, we need to control the supply.

“During the ITRC meeting, we will discuss on the Agreed Export Tonnage Scheme to stabilise the rubber prices.

“We will have an urgent meeting on the Sept 15 at Bangkok to stabilise the current rubber price volatility," he said, adding Malaysia can further cut rubber exports from the current 10 per cent to 15 per cent.” he told a press conference at an Aidilfitri open house hosted by his ministry in Putrajaya on Monday.

Mah said a draft memorandum on rubberised road between Malaysia, Indonesia and Thailand would be prepared at the meeting in an effort to increase demand and usage of rubber.

 “The three countries will increase the use of rubber in their respective countries. The cost of rubberised road is slightly higher in the beginning. However, it lasts longer and in long term, its maintenance is cheaper.

“We will have an agreement on how to increase the use of rubberised road, especially in the three countries during the meeting,” he said.

Rubberised road is a mixture of scrap rubber and bitumen, which is more durable. Over the past two years, the Malaysian Rubber Board and Public Works Department have conducted a joint study to determine the effectiveness of using Cuplump Modified Asphalt for road construction or resurfacing works.

“We need to look after the interests of 450,000 rubber smallholders and ensure that rubber prices remain stable,” he said.

China growth outlook less rosy than trade number suggests

On the surface, China’s latest trade data indicates a rather promising economic outlook.

Imports rose 17.2 percent in June in US dollar terms, and exports also increased — by 11.3 percent — leading to a trade surplus of US$42.8 billion last month.

But if one looks closer, there are a few soft spots.

For example, the nation’s electronic and machinery exports dropped by US$600 million to US$4.7 billion in June from the previous month. Steel and coal exports even contracted, showing that foreign demand for raw materials is waning.

Meanwhile, China’s imports of iron ore, crude oil, natural rubber and synthetic rubber imports all dropped in June compared with the previous month.

Imports of high-tech products fell to US$3.5 billion in June from US$4.2 billion in May.

On external demand, although China’s exports to developed nations, like the US, Europe and Japan, picked up last month, shipment to emerging markets like ASEAN members moderated.

The leading indicators PMI in both the US and Japan has shown signs of easing recently, and the eurozone economic cycle usually lags behind the US, indicating that external demand in the second half may not be that robust.

Meanwhile, a drop in the nominal effective exchange rate of the Chinese renminbi gave a boost to exports. Yet, room for further decline of the currency looks limited.

In the meantime, domestic demand is also in question.

China is set to further tighten property curbs and keep a tight grip on local government debt. As a result, the nation’s housing and infrastructure sectors are set to see moderating investment growth.

China data dated 17 Jul 2017

China data looks good to help Shanghai up

Rubber price faces future dip

Rubber prices this year will be stable but low prices can be expected from next year until 2022 due to over-supply, according to the Ministry of Agriculture.

Minister of Agriculture Veng Sakhon said yesterday at a workshop on technology transfer that global rubber supply will be about 12.7 million tonnes this year, leaving a shortfall of about 36,000 tonnes.

“The price of rubber could be stable if the price of crude oil was $54 to $60 per barrel,” Mr Sakhon said, pointing out that current prices are between $45 to $48 per barrel.

He added that from 2018 until 2022 the supply of rubber would rise by more than demand, which would push prices down again.

However, he said that from 2023 the price would rise as demand overtakes supply.

Mr Sakhon said fluctuating prices were due to supply and demand, while other factors which affected the price of rubber included the global economy, crude oil prices, fluctuating currency exchange rates, and prices of other commodities on the market. 

The price for natural rubber was on average $1,940 per tonne and Cambodia exported about 41,652 tonnes in the first four months of 2017, compared with the same period last year. However, the price of rubber on the global market now is about $1,700 per tonne.

To boost the rubber sector and help Cambodian smallholder farmers in the rubber industry, the Cambodian Rubber Research Institute collaborated with the International Rubber Research and Development Board to conduct the workshop.

The board consists of nine countries – Cambodia, Thailand, Vietnam, Malaysia, Sri Lanka, Australia, France, Philippines and China – and the workshop was to share experiences and transfer technology to smallholder farmers.

The workshop also aimed to address challenges in the rubber sector and seek effective solutions to ensure quality and sustainable development. 

Mr Sakhon said it was important to transfer technological knowledge to stakeholders in the rubber sector to ensure the sustainability of the industry.

Datuk Abdul Aziz Kadir, secretary-general of the International Rubber Research and Development Board, said the board’s role was to build capacity in the rubber sector.

The board, he said, provided technical training to member countries. 

“We have been conducting workshops in different countries, including Thailand and Vietnam. This is part of our capacity building effort for member countries,” said Mr Abdul Aziz.

Land for cultivating rubber has increased to about 437,000 hectares, 64 percent of which is controlled by rubber industry firms and the rest by family-run operations, according to the Agriculture Ministry.

Cambodia exported about 50,000 tonnes of rubber in the first quarter of 2017