Benchmark Thai, Indonesian rubber hit record high

Bangkok (Reuters): Rubber prices in Thailand, the world’s biggest producer, hit a record high on Friday after disruption to the market caused by flooding in the south of the country, traders said.

Measures announced by the Federal Reserve this week to boost the U.S. economy have also played a part, spurring heavy buying of commodities and equities across Asia.

Rubber prices in Indonesia, the second-biggest producer, also hit a record, and rubber futures in Tokyo, which often set the market trend, hit their highest in 30 years. Futures on the Shanghai market hit a record high.

Thai smoked rubber sheet (RSS3) was traded at $4.20 per kg, beating the previous record of $3.95 set initially in April and then seen again in October.

“I’ve just sold 500 tonnes of RSS3 at $4.20 per kg for December shipment to tyre makers in Japan,” a Thai trader said.

Indonesian SIR20 block rubber grade changed hands at a record 187.25 cents per lb, traders said.

“There are deals with Singapore dealers and even U.S. buyers,” said a trader on Indonesia’s main growing island of Sumatra.

Traders offered Thai RSS3 at $4.30 per kg on Friday, but no deals were reported at that level. Indonesian SIR20 was offered at $2.0 per lb.

TOCOM rubber hit 362.9 yen ($4.50) per kg, the highest since March 1980.

The most active Shanghai rubber futures contract for May delivery rose by the daily limit to a new high of 35,025 yuan per tonne.

Rubber prices were expected to stay high for some time because of tight supply after major producing countries, especially Thailand, were hit by unusually heavy rain.

The south of Thailand, which is its main area for rubber, was inundated earlier this week, effectively shutting down trade in the city of Hat Yai, the centre of the rubber business.

At least 30 people have died in the south, and even though the flooding has now receded, trade remains sluggish and rubber sheet is in short supply because the rain halted tapping and disrupted transport.

Around 90 percent of the 3 million tonnes of rubber that Thailand produces each year comes from the south.

Flooding has also affected northern Malaysia, the third-biggest rubber producer. In contrast, Indonesia is in its dry season but that also reduces the supply of latex from trees. ($1=80.72 Yen)

Tokyo futures hit 30-year high

Bangkok (Reuters): Tokyo rubber futures jumped nearly 5 percent to a 30-year high on Friday on heavy speculative buying following the Federal Reserve’s latest move to boost the U.S. economy, plus the tight supply situation, dealers said.