Natural Rubber Prices Ease
(Akron/Tire Review) Rubber planters in Asia are tapping trees faster than ever, pushing down prices and helping a recovery in shares of tyre manufacturers Bridgestone Corp., Groupe Michelin and Goodyear Tire & Rubber Co. Rubber prices in Tokyo, the world’s biggest futures market for the material, have fallen 20 per cent since reaching a record on 12 June. Supply has risen after companies such as PT Astra Agro Lestari planted more rubber trees in Indonesia and Malaysia to keep up with Chinese consumption. Now, China is taking steps, such as last week’s interest rate increase, to slow its economy.
“The price of natural rubber may fall and that eases concerns among investors,” said Ichiro Takamatsu, chief investment officer at Alphex Investments Co., a Tokyo-based hedge fund that holds Bridgestone shares. “Bridgestone’s earnings prospects are bright.” Shares of Tokyo-based Bridgestone, the world’s second- largest tyre maker, have climbed 15 per cent in the past month while stock in Clermont-Ferrand, France-based Michelin, the biggest, has climbed 16 per cent. Akron-based Goodyear, the biggest U.S. tyre maker, also has rallied 16per cent.
At their 2006 lows, set late last month, the stocks had fallen 11 per cent, 14 per cent and 39 per cent, respectively, over the past year.
Rubber production this year will rise 9 per cent in Malaysia, 6 per cent in Vietnam and 3.9 per cent in Indonesia, contributing to a record annual supply, according to Prachaya Jumpasut, an analyst at the London-based International Rubber Study Group. The six largest rubber producers – Thailand, Indonesia, Malaysia, Vietnam, India and Sri Lanka – account for more than 90 per cent of the world’s natural rubber.