Rubber

Rubber: Rubber prices fell to a four-year low, as futures contract for Sep delivery tumbled 2.9% to an intraday low of ¥200.50/kg on the Tokyo Commodity Exchange, its lowest level since Oct ’09. Prices extended its decline on growing concerns that China’s economic slowdown would weaken demand for rubber. The HSBC China Manufacturing PMI for Apr ’14 is due this coming Wed, with Bloomberg consensus estimating the reading to come in at 48.2, signaling a contraction. Separately, the Rubber Economist expects the global rubber surplus this year to be 78% larger than 2013 due to weakening demand and higher-than-forecast output from Thailand. The slump in rubber prices does not bode well for rubber producers, giving limited leeway for any increase in selling prices and margin expansion. Notable rubber-related counters listed on SGX include GMG Global, Sri Trang and Halcyon Agri and Goodpack.