North Sumatra is predicted to decrease by 30% -40% until June 2018

The production of rubber estates in North Sumatra is predicted to decrease by 30% -40% until June 2018.

General Secretary of the Rubber Association of Indonesia Rubber Company Edy Irwansyah said the disruption of rubber production in this plantation due to the second leaf fall in 2018.

"It has been reported from several rubber plantation centers in North Sumatra, a second leaf fall in 2018," he said in a written statement on Sunday (29/4/2018).

According to Edy, this second leaf fall occurred in Labuhan Batu, Asahan, and Simalungun. Furthermore, he explained that the first leaf fall that occurred in early 2018 is an annual cycle that occurs naturally because of the mechanisms of plant adaptation to environmental conditions that enter the dry season.

However, the second leaf fall that occurred since the beginning of April to this day is thought to be the effect of anomalous weather in which rainfall suddenly becomes high. This then stimulates the growth of the fungus.

"The deciduous leaves are not old leaves as in early 2018, but on the shoots of young leaves and leaves caused by a kind of fungus," added Edy.

Nevertheless, it still can not describe how far this condition will affect the rubber factory. The reason is, even if there is a shortage of supply from the garden, the plant can still operate by relying on supply from other provinces although there will be consequences of higher prices.

US Consumer better, NR Rebound

Rubber prices rebounded and ended higher in trading today, Wednesday (25/4/2018), amid the depreciation of the yen against the US dollar.

The price of rubber for delivery in September 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed up 0.48% or 0.90 points at 188.80 yen per kilogram (kg), reversing the weakening experienced in the previous trading session.

Rubber starts to rebound as it opens in the green zone with a 0.05% rise or 0.10 point at 188 this morning. In trading Tuesday (24/4), the price of this commodity ended down 0.48% at the level of 187.90 points.

According to Naohiro Niimura, a partner at Market Risk Advisory research firm, the weakening yen boosted buying action against rubber.

The yen today tracked down 0.31% or 0.34 points to 109.15 per dollar at 13:56 pm, after ending depreciating 0.09% at 108.81 yesterday. Thus, the yen has weakened for the sixth straight day.

As is known, the movement of rubber prices is usually inversely proportional to the yen. Yen breaking gives fresh air for rubber and can lift the price of this commodity with the potential increase of demand from buyer.

"The level of US consumer confidence is better than expectations also provide support. Nevertheless, the strengthening of [rubber price] is limited by the weakness of equity that triggers the sale, "Niimura continued, as quoted by Bloomberg.

US consumer confidence in April unexpectedly rose to the second highest level since 2000, as optimism among Americans grew larger on both current conditions and the economic outlook, according to Conference Board data.

The Confidence Index rose to position 128.7, higher than 126 forecasts as well as the level achieved in March of 127.

On the other hand, the movement of Asian stock markets in trading today fell following the US market, as concerns about the earnings outlook weighed on industrial and tech stocks.

Meanwhile, US 10-year bond yields stabilized after breaking the 3% level, for the first time in four years.

TOCOM ends lower on weak Shanghai futures, high inventory

Benchmark Tokyo rubber futures ended lower on Tuesday, taking cues from a weak Shanghai market, as domestic rubber stockpiles continued to grow.

Tokyo Commodity Exchange (TOCOM) futures, which set the tone for rubber prices in Southeast Asia, fell slightly on Tuesday after hitting a one-month high last week.

"Rubber stocks are still quite high. Demand, on the other hand, is steady. So the rise would be limited," said Zhang Li, analyst, First Futures.

The Tokyo Commodity Exchange rubber contract for October delivery finished 1.2 yen lower at 187.6 yen per kg.

The most-active rubber contract on the Shanghai futures exchange for September delivery dropped 115 yuan to finish at 11,530 yuan per tonne.

The front-month rubber contract on Singapore's SICOM exchange for May delivery last traded at 138.5 U.S. cents per kg, down 1.8 cents.

China's Economy Positive, Rubber Price Closed Rebound

Rubber prices closed a rebound in late trading today, Tuesday (17/4/20174), buoyed by strong Chinese economic data.

The price of rubber for delivery in September 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed up 0.56% or 1 point to as low as 18.20 yen per kilogram (kg).

This morning the rubber price opened a rebound 0.17% or 0.30 points at 179.50 position, after yesterday's trading on Monday (16/3), the rubber closed down 3.03% or 5.6 points at 179.2 position .

Gu Jiong, commodity broker analyst Yutaka Shoji in Tokyo, said strong Chinese economic data boosted optimism that demand for rubber would increase.

"Investors are also paying attention to the tight supply of commodities in Thailand during the low production season," he said, as quoted by Bloomberg.

Meanwhile, China's economic growth is able to survive strongly amid solid consumer spending. The China National Bureau of Statistics (NBS) report on Tuesday (17/4/2018) revealed that China's Gross Domestic Product (GDP) grew 6.8% in the first quarter of 2018 from the previous year.

This achievement is equal to growth in the previous quarter and is in line with projections in a Bloomberg survey.

Meanwhile, retail sales increased 10.1% in March from a year earlier, industrial production rose 6% last month, and fixed asset investment climbed 7.5% in the first quarter of this year.

Meanwhile, today's yen exchange was observed to rise 0.17% or 0.18 points to 106.94 yen per US dollar at 14:15 pm.

Global Demand Increases, Rubber Price Stronger

Rubber prices continued to strengthen at the end of trading the second day in a row, Friday (13/4/2018), following reports of rising global demand beyond global supply.

The price of rubber for delivery in September 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed up 0.98% or 1.80 points at 184.80 yen per kilogram (kg).

This morning the rubber price opened with a 0.16% rise or 0.30 points at 183.30, after successfully rebounding and ending up 0.60% or 1.10 points at 183 level in trading on Thursday (12/4).

The Association of Natural Rubber Producing Countries (ANRPC) said global demand for natural rubber rose 7.6% y / y to 3.36 million tonnes in the first quarter.

On the other hand, global supply grew 3.3% y / y to 3.15 million tonnes in the first quarter.

Meanwhile, according to Sunward Trading analyst Hideshi Matsunaga, rubber prices recovered as the Tokyo exchanges look oversold compared to the physical rubber market.

"The low production season in Thailand as well as the depreciation of the yen against the US dollar also gave a boost," added Matsunaga.

Today's yen exchange rate continued to weaken 0.29% or 0.31 points to 107.64 position per US dollar at 13:49 pm, having ended weakened 0.51% or 0.54 pound at level 107.33 on Wednesday (12/4).

As is known, the movement of rubber prices is usually inversely proportional to the yen. Yen breaking gives fresh air for rubber and can lift the price of this commodity with the potential increase of demand from buyer.

China's Inflation Slows, Rubber Price Slows

Rubber prices slipped and ended lower in today's trading on Wednesday (11/4/2018), weighed by concerns about sluggish demand for the commodity.

The price of rubber for delivery in September 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed down 0.87% or 1.60 points at 181.90 yen per kilogram (kg).

This morning the rubber price opened stagnant at 183.50 position, after strengthening 1.21% or 2.20 points at the end of trading Tuesday (10/4).

According to Naohiro Niimura, a partner at market research firm Risk Advisory, the signs of China's economic slow down have the potential to weaken demand for rubber.

China's inflation rate retreated from a four-year high in March 2018, while production inflation slowed for a fifth month in a row.

Based on China's statistics bureau data, the consumer price index (CPI) rose 2.1% in March 2018 (year-on-year / yoy), lower than economists' forecast in a Bloomberg survey of 2.6% and CPI in February at 2.9%.

Meanwhile, the producer price index (PPI) rose 3.1% in March compared to the same period the previous year, lower than the 3.3% projection in a Bloomberg survey and a 3.7% gain in February.

"However, the decline was limited to a dovish dubbed Xi Jinping speech on Tuesday [10/4], thereby providing a relief that a trade war between the United States (AS0 and China could be avoided," Niimura said, as quoted by Bloomberg.

In line with rubber, West Texas Intermediate oil prices slid and fell 0.24% or 0.16 points to as low as US $ 65.35 per barrel on the New York Mercantile Exchange at 13:52 pm.

The Nikkei 225 index also ended in the red zone by falling 0.49% or 107.22 points and ending at 21,687.10, after closing up 0.54% or 116.06 points at 21,794.32 on Tuesday (10 / 4).

In addition to pressing the rubber, the yen today strengthened 0.11% or 0.12 points to 107.08 per US dollar at 14.02 WIB.

Rubber Prices Up on the Third Day.

Rubber price rally continued and ended up more than one percent on the third day of trading in a row on Tuesday (10/4/2018), sustained reports of falling commodity reserves in Qingdao.

The price of rubber for delivery in September 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed up 1.21% or 2.20 points at 183.50 yen per kilogram (kg).

This morning the rubber price opened in the green zone with a rise of 0.22% or 0.40 points at position 181.70. On Monday (9/4) trade, the rubber ended up 1.12% or 2 points at the 181.30 level.

According to Kazuhiko Saito, an analyst at brokerage firm Fujitomi, a report released last night showed the amount of rubber reserves in Qingdao, China, fell for a third week, boosting optimism for recovery in demand in China.

Meanwhile, the amount of natural rubber inventories in Qingdao fell 12% to 107,800 tonnes during the week ended March 30, the decline for the 3rd week, to the lowest level since January 2017.

"Some traders are also worried about supply during the low production season as Thailand slashed its exports more than expected," Saito added, as quoted by Bloomberg.

Along with the rubber, West Texas Intermediate oil prices gained 1.31 percent, or 0.83 points, to settle at $ 64.25 a barrel on the New York Mercantile Exchange at 13.40 pm.

Supporting the rubber, the Nikkei 225 index ended up 0.54% or 116.06 points to 21,794.32, after opening down 0.36% or 78.59 points at 21,599.67.

The yen today was down 0.37% or 0.40 points to 107.17 per dollar at 13.50 WIB, after ending up 0.14% at 106.77 on Monday (9/4) .

Rubber Prices Up, Following Crude Oil

Rubber prices managed to resume its rally and ended up more than one percent in the second day of trading in a row on Monday (9/4/2018), supported by the strengthening of crude oil.

The price of rubber for delivery in September 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed up 1.12% or 2 points at 181.30 yen per kilogram (kg).

Though the price of rubber had slipped into the red zone after it opened down 0.39% or 0.70 points at 178.60 position. On Friday's trade (6/4), the rubber rebounded and ended up 1.70% or 3 points at 179.30.

According to Gu Jiong, an analyst at brokerage firm Yutaka Shoji, rising crude oil prices and expectations of a decrease in the amount of rubber reserves in Qingdao have helped boost rubber prices.

The price of West Texas Intermediate oil was up 0.42% or 0.26 points to as low as US $ 62.32 per barrel on the New York Mercantile Exchange at 13.42 WIB.

Meanwhile, the amount of rubber inventory in Qingdao fell 8% to 122,000 tonnes on March 23, the decline for week 2.

On the other hand, the number of stocks monitored by the Shanghai Futures Exchange rose 0.4% to 444,611 tons last week, an increase for the 19th week, to its highest level since November.

Supporting the rubber, the Nikkei 225 index rebounded and ended up 0.51% or 110.74 points to 21,678.26, after opening down 0.15% or 33.19 points at 21,534.33.

The yen today was down 0.17 percent or 0.18 points to 107.10 per dollar at 13:52 pm, after ending up 0.43 percent at 106.92 on Friday (6/4) .

Rubber-related Chinese imports subject to tariffs

WASHINGTON—At least 10 categories of tires, rubber, rubber products and rubber processing machinery are on the list issued by the Office of the U.S. Trade Representative of goods imported from China that are subject to a 25 percent tariff.

The USTR issued the list on its website in response to the order President Trump signed March 22, encompassing Chinese goods worth an estimated $50 billion.

The proposed list encompasses approximately 1,200 separate tariff lines as defined under the Harmonized Tariff Schedule of the U.S., USTR said in a notice pending publication in the Federal Register as of April 4.

Tire- and rubber-related goods on the list are as follows:

• 40061000: "Camel-back" strips of unvulcanized rubber for retreading rubber tires;
• 40091200: Tubes, pipes and hoses of vulcanized rubber other than hard rubber, not reinforced or combined with other materials nesoi, with fittings;
• 40094200: Tubes, pipes and hoses of vulcanized rubber other than hard rubber, reinforced or combined with other materials nesoi, with fittings;
• 40101100: Conveyor belts or belting of vulcanized rubber, reinforced only with metal;
• 40113000: New pneumatic tires, of rubber, of a kind used on aircraft;
• 40121300: Retreaded pneumatic tires, of rubber, of a kind used on aircraft;
• 40121980: Retreaded pneumatic tires (non-radials), of rubber, not otherwise specified or included;
• 40169915: Caps, lids, seals, stoppers and other closures, of noncellular vulcanized rubber other than hard rubber;
• 84659200: Planing, milling or molding (by cutting) machines for working wood, cork, bone, hard rubber, hard plastics or similar hard materials; and
• 84659300: Grinding, sanding or polishing machines for working wood, cork, bone, hard rubber, hard plastics or similar hard materials.

According to the USTR notice, the administration chose to levy tariffs against all these products because of various unfair Chinese trade practices.

"The Chinese government reportedly uses a variety of tools, including opaque and discretionary administrative approval processes, joint venture requirements, foreign equity limitations, procurements, and other mechanisms to regulate or intervene in U.S. companies' operations in China, in order to require or pressure the transfer of technologies and intellectual property by Chinese companies," the notice said.

The Chinese government also follows practices and policies that deprive U.S. companies of the ability to set market-based licensing terms with Chinese companies, it said.

USTR has scheduled a public hearing on the proposed tariffs May 15 at the headquarters of the U.S. International Trade Commission, according to the notice. Interested parties have until April 23 to file requests to appear at the hearing and May 11 to submit written comments.

The agency strongly prefers electronic submissions made through the federal e-rulemaking portal, regulations.gov. The docket number is USTR-2015-005, USTR said.

Organizations such as the U.S. Tire Manufacturers Association, the Tire Retread & Repair Information Bureau and the Association for Rubber Products Manufacturers could not immediately be reached for comment. The Tire Industry Association said it would not take a stand on the tariffs, because of the divergent opinions of its retreader and commercial tire dealer members.

China retaliated against the U.S. with its own list of U.S. goods facing 15- and 25-percent tariffs. The goods encompassed fruits, nuts, wine, pork products, steel products and aluminum scraps, but nothing directly tire- or rubber-related.

China's Rubber Reserves Increase, Rubber Prices Weak on Fourth Day

Rubber prices continued weakening at the end of trading the fourth day in a row on Thursday (5/4/2018).

The price of rubber for delivery in September 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed down 1.84% or 3.30 points to 176.30 yen per kilogram (kg).

Previously, the rubber price opened down 0.33% or 0.60 points position 179, after ending down 0.28% or 0.50 points to 179.60 level in trading Wednesday (4/4/2018).

According to Kazuhiko Saito, an analyst at brokerage firm Fujitomi in Tokyo, high levels of rubber reserves in China and concerns over declining demand weighed on market sentiment today.

"Sentiment is depressed amid low trading volume along with holidays in China," Kazuhiko said, as quoted by Bloomberg.

Rubber stocks tracked by the Shanghai Futures Exchange increased 0.4% to 444,611 tonnes as of Thursday (5/4). This is an improvement in the 19th consecutive week.

Meanwhile, today's yen exchange rate was down 0.27% or 0.29 points to 107.07 position per US dollar at 15.02 WIB.

Sluggish Economic Data, Rubber Prices Weak on Day Two

Rubber prices closed lower again in the second day of trading in a row, Tuesday (3/4/2018), depressed fears of weak demand.

The price of rubber for delivery in September 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed down 0.83% or 1.50 points to 180.1 yen per kilogram (kg).

Previously, rubber prices opened stagnant at 181.60 position after ending down 1.30% or 2.40 points on Monday trading (2/4/2018).

According to Gu Jiong, an analyst at brokerage firm Yutaka Shoji in Tokyo, concerns surrounding weak demand alongside sluggish economic data and declining Nikkei performance have put pressure on rubber prices.

Nikkei 225 index today closed down 0.45% or 96.29 points to 21,292.29 level, after it opened slipped 1.28% or 273.10 points at 21,115.48 position.

Rubber prices were depressed on the second day, following the data of Japanese business sentiment. The index of business sentiment according to the BOE's BOE survey dropped to 24 in the first quarter, lower than analysts' forecast of 25 at the same time at 26 levels in the previous quarter.

Meanwhile, manufacturing purchasing managers index released by Caixin Media and Markit Economics for March showed a decline to 51 from 51.6 in February. "The trade tension between the United States and China adds negative sentiment to rubber," added Gu Jiong.

China announced yesterday imposing import tariffs of up to 25% on 128 US products, raising tensions between the world's two largest economies.

On the other hand, today's yen exchange rate is turning down 0.08% or 0.08 points to 105.97 per US dollar at 14.10 WIB, after ending up 0.36% at 105.90 on Monday ( 2/4)

Rubber Prices Drop Absorbed US-China Trade Tension

Rubber prices fell more than 1 percent for the second straight day of trading on Tuesday (3/4/2018), in line with the weakening Japanese stock market.

The price of rubber for delivery in September 2018, the most-active contract on the Tokyo Commodity Exchange (Tocom), slipped 1.16 percent or 2.10 points to 179.50 yen per kg at 10:52 pm.

Previously, rubber prices opened stagnant at 181.60 position after ending down 1.30% or 2.40 points on Monday trading (2/4).

According to Gu Jiong, an analyst at brokerage firm Yutaka Shoji in Tokyo, concerns surrounding weak demand alongside sluggish economic data and declining Nikkei performance have put pressure on rubber prices.

Nikkei 225 index today fell 0.58% or 123.16 points to the level of 21,365.42 at 10:38 pm, having opened slipped 1.28% or 273.10 points at 21,115.48 position.

Rubber prices were depressed on the second day, following the data of Japanese business sentiment. The index of business sentiment according to the BOE's BOE survey dropped to 24 in the first quarter, lower than analysts' forecast of 25 at the same time at 26 levels in the previous quarter.

Meanwhile, manufacturing purchasing managers index released by Caixin Media and Markit Economics for March showed a decline to 51 from 51.6 in February.

"The trade tension between the United States and China adds negative sentiment to rubber," added Gu Jiong.

China announced yesterday imposing import tariffs of up to 25% on 128 US products, raising tensions between the world's two largest economies.

On the other hand, today's yen exchange rate is turning down 0.05% or 0.05 points to 105.95 per dollar at 10:58 pm, having ended up 0.36% at 105.90 on Monday ( 2/4).

Contract Rubber Price Movement September 2018 in Tocom

Rubber Price Weaken Over 1%, Weighed on Demand Concerns

Rubber prices slumped to the red zone by more than 1% in today's trading on Monday (2/4/2018), weighed by concerns about demand for the commodity.

The price of rubber for delivery in September 2018, the most active contract on the Tokyo Commodity Exchange (Tocom), closed down 1.3% or 2.40 points to 181.60 yen per kilogram (kg).

In fact, rubber prices had resumed gains in the green zone after opening with an increase of 0.33% or 0.60 points at the level of 184.60 yen per kg.

On Friday's trade (30/3) rubber price for September 2018 contract finished up 1.10% or 2 points at the level of 184 yen per kilogram (kg).

According to Naohiro Niimura, a partner at Market Risk Advisory research firm, the release of Tankan data by the Bank of Japan (BOJ) today raises concerns about rubber demand.

The sentiment of confidence among major Japanese manufacturers slipped from the highest level in more than a decade in the first quarter of 2018, due to the burden of currency appreciation that depressed the earnings outlook.

The business sentiment index, according to the BOE BOE's Tankan survey, fell to 24 in the first quarter, lower than analysts' forecast of 25 at the same time at 26 levels in the previous quarter.

Meanwhile, the outlook among large producers and for large non-producers fell to 20 each. Among small firms, producer sentiment indexes did not change at level 15, while non-producer firms rose to 10 from 9.

On the other hand, today's yen exchange rate was weakened 0.02% or 0.02 points to 106.3 position per US dollar at 14:59 pm, having ended up 0.14% at 106.28 on Friday trading ( 30/3).

"At the same time, [rubber prices are weighed] rising supply concerns as exporters continue their export activity," Niimura added.

As is known, the program of export restrictions by a number of major producing countries namely Thailand, Indonesia and Malaysia has ended on March 31

Rubber Export Restrictions Have Not Significant Impacts to World Rubber Prices

The implementation of rubber export restrictions through the Agreed Export Tonnage Scheme (AETS) has not had a significant impact on the increase of world rubber price. The export scheme has been implemented in the first quarter of 2018 by Indonesia, Malaysia, and Thailand as the largest rubber producer incorporated in the International Tripartite Rubber Council (ITRC) agreement.

Although it has not had a significant impact on price improvement, but at least that restriction can reduce the pressure of the selling price decrease so as not to plummet too deep.

"AETS policy has become technical, no longer fundamental," said Chairman of Indonesian Rubber Industry Association (Gapkindo) Moenardji Soedargo to Katadata, Monday (2/4).

Referring to the International Rubber Consortium (IRCo), rubber SIR 20 touched the level of US $ 2.33 per kilogram early last year, then dropped to around US $ 1.46 in November 2017. However, when the AETS restriction policy began to be established in December 2017 until January 2018, admitted Moenardji prices began to move steadily.

The issue of trade war between the United States (US) and China also recorded has made the price pressured to reach US $ 1.52 per kg, where the price of rubber SIR 20 observed reached about US $ 1.46 on March 19, 2018. "Towards the end of March , the market is again depressed for commodities, "said Moenardji.

Meanwhile, the Director of the APEC and International Organization of Trade, Directorate General of International Trade Negotiations, Ministry of Trade, Deny Wachyudi Kurnia explained the evaluation of the three countries related to the implementation of AETS will be done after rubber price data out on April 15, 2018.

"We will evaluate the plan in May," he said.

In addition to price issues, many other conditions are also highlighted by the three countries. For example, in respect of each country's compliance with the achievement of the AETS objectives of preventing over-supply in the international market.

The restriction of rubber exports in AETS policy is also considered to have no effect on the welfare of farmers. Therefore, to increase the added value of natural rubber, farmers ask the government to issue a downstream policy or rubber processing industry in the country.

Chairman of the Association of Indonesian Rubber Farmers (APKI) Lukman Zakaria said the government should issue a policy that raises the value added rubber farmers. "Hilirisasi is done so that farmers become export producers, not just in rubber suppliers at the upstream level," said Lukman, last February.