IRCo's WEEKLY MARKET SNAPSHOT: 29 November - 3 December 2010

IRCo's DCP ended the week at 439.35 US cents/kg., and it still pulled up its 14-day DCP on Friday. Rubber futures and physical markets in the region also settled higher on Friday than Monday because of persistent supply tightness and steady demand. A sharp rise in crude oil futures and an insignificant change in the Japanese yen against the greenback also lent support for rubber prices to climb up consecutively during the week.

Price volatility on Shanghai rubber futures is expected to be less than the past as the China Securities Regulatory Commission (CSRC) raised trading margins to more than 10% and limits on daily price moves starting on 26 November 2010 in order to curb speculation in futures markets, according to Reuters on 1 December 2010. And rubber prices are likely to stay above US$4.0 per kg. at least until 1Q11 as anticipated.

On the investment front, global stock markets were mixed during the week as concern over tension in Korean peninsular, European debt problems and a rise in the November unemployment rate of 9.8% in the U.S. undermined investor confidence that weakened the greenback against its rival currencies and lifted commodity prices, including crude oil futures and rubber prices. However, holiday shopping will boost consumer stocks in December at some levels.

(Source: http://www.irco.biz/MarketWise.php?PHPSESSID=9cbf002318dc75d77a0e4b89c10996ec)