TOKYO(Commodity Online): Rubber stockpiles in China’s Qingdao warehouses have dropped sharply. The total stocks as on Monday stood at 192,200 tonnes. The news of slump in the worlds top rubber consumer has resulted in a price rise in Tokyo commodity exchange(Tocom).
The most active contract at Tocom surged 1.7 % to settle at 190.2 yenn/kg. Tokyo futures have fallen more than 30 percent so far this year, hurt by worries about China’s economy and recently by Thailand’s decision to sell the country’s 200,000-tonne rubber stockpile.
Three years ago, record-high rubber prices drove producers to ramp up their output. But as more product hit the market, China — the world’s top rubber buyer — experienced an economic slowdown, and new Chinese car sales dropped. The resulting rubber glut caused futures prices to drop 28 percent this year, hitting the lowest level in nearly five years in June.
According to the International Rubber Study Group, Rubber production will exceed demand by 202,000 metric tons next year, compared to 371,000 tons this year and 650,000 tons in 2013. In Thailand, the top grower and exporter of rubber, government officials want to replace about 8 percent of the country’s total rubber-growing area with more profitable oil palm trees. Even so, total rubber inventories will jump to 4.33 million tons in 2015, about 15 percent more than 2014’s expected total and about 50 percent over 2013 amounts.
– Commodity Online
