Asian rubber rebounded Wednesday from the sharp previous losses that were triggered by the
aftermath of last week's earthquake in Japan, as a broad-based market recovery contributed to strong gains on the
bellwether Tokyo Commodity Exchange.
Benchmark August Tocom rubber settled Y16, or 4.5%, higher at Y369 a kilogram, as investors covered short positions
and hunted bargains.
Sentiment toward rubber futures was also boosted by producing countries' support for prices over the last two days and
the resumption of automotive plant operations in Japan.
Toyota Motor Corp. will resume operations at seven of its automotive parts plants in central Japan from Thursday, the
Yomiuri Shimbun reported. Meanwhile tire major Bridgestone Corp. said it would resume production at three of its
Japanese plants Wednesday. It plans to use power generators to keep those factories running during the country's rolling
blackouts.
A Tokyo-based commodities analyst said that although natural rubber's supply-demand fundamentals are firm, sentiment
remains fragile in Japanese markets due to the nuclear crisis, with several reactors still overheating and threatening
to release dangerous levels of radiation.
Benchmark Tocom rubber extended gains to close Y15, or 4.1%, higher at Y384/kg in the night session, which is
considered part of the next day's trading.
Shanghai and Thai rubber futures also rose, and physical rubber prices advanced on cues from the futures markets.
"Prices are still a little bit all over the place today (Wednesday). The market is still trying to settle down," a
Singapore-based dealer in the physical market said. "People are still a little confused about where fair price levels
are. There are genuine buyers, but there are also some just fishing around for prices."
Some major Thai exporters who didn't actively offer Monday and Tuesday started to offer on Wednesday as the market
showed signs of recovery.
The sharp slide in prices from Tocom's peak on Feb. 18 has resulted in some defaults by Chinese buyers, but the majors
haven't pulled out of deals yet, the Singapore-based dealer said. Even before Japan's massive quake on Friday, the
market was already abuzz with default concerns as prices have corrected down sharply.
The International Rubber Consortium, which represents the Southeast Asian countries that produce two thirds of the
world's natural rubber, will work with the China Rubber Industry Association to counter rubber price volatility, the
head of IRCo said Wednesday.
Bellwether Tokyo rubber futures hit a record high early last month, but have since fallen to multi-month lows due to
tensions in the Middle East, policy tightening in China and the destruction caused by the earthquake and tsunami that
struck Japan last week.
Meanwhile, data from Thailand showed new vehicle sales rose 42.5% in February from a year earlier, marking the 18th
straight month of expansion, the local unit of Toyota Motor Corp. (7203.TO) said Wednesday.
Asian Rubber Futures
March 16 Change from
previous settlement
Tocom Aug RSS3 Y369/kg Up Y16
Shanghai May SCR5 CNY33,500/ton Up CNY230
Thai Oct RSS3 THB132.5/kg Up THB7
Sicom Apr RSS3 458.7 U.S. cents/kg Up 28.7 cents
Sicom Apr TSR20 434 U.S. cents/kg Up 36 cents
Physical prices in Asia, quoted in U.S. cents/kg, free on board:
Grade Shipment March 16 March 15
Bids Offers Bids Offers
RSS3 Apr/May - 460-465 - 430-440
STR20 Apr/May - 415-420 - 410
SIR20 Apr/May - 420-430 - 400
SMR20 Apr/May - 425 - 400
USS3 Mar THB102.37-THB103.55/kg THB98-THB101.55/kg
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