Japan earthquake exacerbates rubber price decline
Rubber prices have been in decline of late and the earthquake and tsunami in Japan have added to this downward trend. The trading of rubber futures on the Tokyo Commodity Exchange was suspended following a 30 yen per kilogramme drop in the April-delivery contract (to 378.4 yen) while the August delivery rubber contract declined 4.5 per cent or 17.9 yen to 383.5 yen. This decline was tracked by China's benchmark rubber futures on the Shanghai Futures Exchange, which on March 14 fell by six per cent, the daily limit, to RMB 33,480 per tonne.
“The widespread impact from the earthquake has soured market sentiment,” a Bangkok based analyst commented to Bloomberg. “It has a direct impact on rubber because Japanese carmakers suspended production.” Improved supply in major rubber producing countries was already serving to dampen prices; the Rubber Research Institute of Thailand says tyre industry buyers are delaying purchases on the expectation of prices weakening further. The physical price of Thai rubber fell for the seventh consecutive day on March 11, dropping 1.8 per cent to 161.75 baht a kilogramme. This represents an 18.3 per cent decline since a record price of 198.30 baht was reached on February 21.