Rubber / GMG

Rubber / GMG: Thailand, Indonesia and Malaysia, accounting for 70% of global output, agreed to cut shipments by 300k mt, starting yday. That’s as much as China, the biggest user, imports in ~5 wks and exceeds the 2013 supply surplus forecast by the International Rubber Study Group (IRSG). Producers are cutting output to boost prices that tumbled 51% since reaching a record in Feb ‘11 because of a supply glut and weaker economic growth. When they reduced cargoes in 2009, futures more than doubled that year. Bloomberg consensus estimates Tokyo-traded futures, a global benchmark, will advance 15% to ¥300/kg (US$3,845/ ton) by yr end. Commodity derivatives sales desk at Newedge Japan notes, “The bear market is over”. Tokyo based fund mgr, Astmax echoes, “rubber has bottomed out; the uptrend is set to continue.” Watch for a move in rubber prices which could translate to positive moves in GMG’s share price. GMG is amongst the few listed rubber producers globally.