03/14/2011

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Rubberprices low after earthquake in Japan

The bourse expanded the trading limit for rubber contracts for a second time today to 50 yen from the previous settlement price, the exchange said on its website."The widespread impact from the earthquake has soured market sentiment," Chaiwat Muenmee, an analyst at Bangkok-based broker DS Futures Co., said to reuters. "It has a direct impact on rubber because Japanese carmakers suspended production." Some of Japan's largest manufacturers -- including Honda Motor Co., Nissan Motor Co., Sony Corp. and beermaker Sapporo Holdings Ltd. -- shut down facilities in northern Japan after the March 11 earthquake caused power supply disruption.Toyota Motor Corp., the top carmaker, will suspend output at its Japan factories March 15 and March 16, a spokeswoman said to reuters today. Isuzu Motors Ltd., a Toyota Motor affiliate, will halt production at its two Japan plants until March 18. Hino Motors Ltd. will halt its Japan factories until March 16 at the earliest. Nissan Motor Co., Japan's second-largest automaker, will halt operations at factories in Tochigi and Iwaki until March 18. It will also shut its Oppama, Kyushu, Nissan-Shatai and Yokohama plants until March 16. About 2,300 new vehicles were damaged by the tsunami.Honda Motor will stop production from today at its Sayama, Mouka, Hamamatsu and Suzuka factories, the company said March 12. The impact will be temporary and earnings will normalize as Japanese autoparts and tiremakers have recovered "swiftly" from previous earthquakes, the report said.Bridgestone, the largest tiremaker, has stopped production at four facilities in the Kanto region, the company said on its website. Another factory in Yokohama has partially restarted production, it said."In the short-term, the country's economic and manufacturing activities may be affected and it may have an impact on rubber demand, but the impact isn't substantial," Jom Jacob, senior economist at the Association of Natural Rubber Producing Countries, said in the reuters information issued today. Japan, the fourth-largest rubber consumer, accounts for about 7 percent of global demand, and the area severely hit by quake and tsunami represents about 7.5 percent of its gross domestic product, he said. Rebuilding activities could help revive the economy and be positive for rubber demand, he said.May-delivery rubber in Shanghai plunged by the daily 6 percent limit to 33,480 yuan ($5,096) a ton. The Thai government plans to hold talks with exporters today to discuss measures to try to prevent a slump in local prices, according to Deputy Prime Minister Suthep Thaugsuban.The free-on-board price, or cost without freight and insurance, for Thailand's benchmark ribbed smoked sheet fell today for a eighth day, tumbling 7.1 percent to 150.25 baht ($4.94) a kilogram as buyers from China and India have delayed purchases, the Rubber Research Institute of Thailand said. The price reached a record 198.30 baht on Feb. 21.The auctioned price of ribbed smoked sheet at a rubber trading center in the southern province in Songkhla plunged 18.6 percent to 105 baht a kilogram, while the price of latex declined 15 percent to 97 baht, the institute said.(Source: reuters)

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