Friday, July 27, 2018

Markets will remain under pressure

Investors are more worried about possible imposition of higher import tariffs on Japanese automobiles by the US administration, but the benchmark Tokyo rubber futures recovered and ended on higher note, but were down for a second straight week due to the fears over US-China trade war which may hurt demand in China. The TOCOM rubber contract for January 2019 delivery finished 0.9 yen higher at 168.0 yen per kg.

The rubber contract on the Shanghai futures exchange for September delivery fell 10 yuan to finish at 10,285 yuan per tonne as concerns about oversupply persisted. According to Shanghai Futures Exchange, rubber inventories in its warehouses rose 0.4% from last Friday.

A breakthrough in US-EU trade talks also lent support to oil prices. Oil prices edged lower after three days of gains, but took support from Saudi Arabia suspending oil shipments through the Red Sea's Bab al-Mandeb strait, falling US inventories and easing trade tensions between US and Europe.

According to Rubber Authority of Thailand, to stimulate international prices, Thailand plans to cut supply of up to 50,000 tonnes of natural rubber output by reducing the rubber growing areas.

The benchmark RSS4 grade rubber closed at `.131.50 a kg at Kottayam, while RSS3 grade closed at `.101.24 a kg at Bangkok and Malaysian SMR20 closed at `.90.75 a kg. On Multi Commodity Exchange August 2018, the futures closed at `.132.12 a kg and September closed at `.129.98 a kg. Tokyo Commodity Exchange August 2018 futures series closed at ¥161.6 a kg, September at ¥162.6, October at ¥165.5.2, November at ¥168, December 2018 at ¥168.3 and the contract for delivery in January 2019 closed at ¥168 a kg.

To read Rubber4U – 1st August 2018 issue:
For 2018-19 Rubber Forecast: