IRCo’s WEEKLY MARKET SNAPSHOT: 7 – 11 November 2011

Global financial and stock markets plunged during the week because Europe’s efforts to stem financial contagion foundered on last Wednesday as investors dumped their holdings of Italian government bonds. In stock markets, investors unleashed a wave of selling across the border in Europe and the U.S. Meanwhile, China’s exports in October 2011 rose at their slowest pace in eight months underlying officials concern about the sector that has dragged on economic growth.

These factors brought about a significant down trend on rubber prices on physical and futures markets in the region. IRCo’s Daily Composite Price ((DCP) dropped significantly as much as 35.05 US cents/kg or lost 9.84 percent and settled lower at 321.08 US cents/kg on Friday. A similar significant down trend was also experienced by Thai RSS3 and Thai STR20, which settled lower at 325.16 US cents/kg and at 324.68 US cents/kg compared with their initial prices on Monday. Moreover, Indonesia SIR20 was priced 26 US cents/kg lower at 325.00 US cents/kg. Malaysia SMR20 also tumbled and fell to 335 US cents/kg on Friday.

On Tokyo Commodity Exchange (TOCOM), the benchmark rubber contract for April delivery settled 25.60 Yen/kg lower at 259 Yen/kg on Friday. While the most active rubber contract in Shanghai Futures Exchange (SHFE) lost as much as 2,545 Yuan/ton compared with its initial price on Monday. A significant loss also stroke down AFET’s RSS3 for June delivery, which settled significantly lower at 100.50 THB at the end of the week.

There was no significant change in market fundamentals during the week, and rubber supply remained tight as flood and erratic weather still persist in Thailand and in some rubber planted areas in Indonesia and Malaysia.

Source: http://www.irco.biz/MarketWise.php