GMG Global   

Rubber prices

nostradamus, u are quite rite. GMG still falling... any idea wats the support for this?

 

GMG fell on heavy vol. Looks like more downside.

Tokyo rubber futures fell more than 2.6% as investment funds sold after prices failed to rise above a key level. The benchmark rubber contract on TOCOM for Dec delivery fell 6.7 yen to end  at 246.7 yen per kg.

The benchmark struggled below the 200-day MA of 255.5 yen, a major psychological level, spurring technical sales.

"They wanted to make profit from the downward trend by taking short sale positions," a dealer said.

"It is possible to see prices falling by the 10-yen limit today if funds continue selling," another said.

However, some optimistic traders said rubber futures were still supported by higher oil prices and expected TOCOM to find support around 240 yen.

Physical prices were expected to fall further this week due to better supply as rains stopped in major producing countries, Thailand, Indonesia and Malaysia, traders said.

There was not much demand with many buyers, especially those from China, waiting for prices to fall further, they said.

 

Funny some FA people keep on talking good things about the stock and when the profit warning is out, said to take profit if you've not.

At $0.14, it has broke through the lower band of the channel. Bearish. Refer to the chart a few pages back.

 

The announcement amounts to a profit warning. I'm been bearish all along. Hope you listened to my advice.

 

Reg. No. 199904244E
GMG GLOBAL LTD
55 Market Street #03-01 Singapore 048941 Tel: (65) 62208638 Fax: (65) 63230737
BUSINESS UPDATE
The Directors of GMG Global Ltd refers to the ?Outlook for 2007? Statement made in its 2006 Annual Report whereby it was stated that ?The Group is of the opinion that the natural rubber prices could retain the 2006 price level, given the strong fundamentals in place, but will remain volatile. Barring unforeseen circumstances, no major set-back in prices and production volume, and no major adverse weather impact or major operating disruptions, the Directors expect the existing level of performances to be maintained in 2007.?
Following a preliminary review of the Group?s performance, the Directors do not expect the existing level of performances to be maintained in 2007 due to the following factors:
(1)
Lower yield, and field production caused by extremely bad weather conditions prevailing in the first half ended 30 June 2007 which had adversely affected sales and revenue; and
(2)
Higher operating costs as a result of higher Euro currency and the strengthening of the Singapore Dollars ? the reporting currency.
Further details of the Group performance will be disclosed when the Group announces its unaudited half-year results for FY2007 before 14 August 2007.
By Order of the Board
Elson Ng Keng Kwang
President & Chief Executive Officer
16 July 2007

Be careful.

 

Output of NR in Malaysia, one of the world's leading producers, rose 13.6% to 87,362 tonnes in May from a month earlier, the state-run Malaysian Rubber Board said on Monday.

It said exports of mainly Standard Malaysian rubber during the month fell by 8.7% to 72,589 tonnes. For the 5 months ending May, China was the biggest importer taking 127,176 tonnes, followed by Germany which bought 57,873 tonnes and the US took 24,328 tonnes. The country's NR imports rose 11% to 41,669 tonnes in May from a month earlier, the board said.

Malaysia buys NR mainly in the form of latex concentrates from Thailand, Indonesia, Philippines, Myanmar and Vietnam for its glove-making industry, the world's largest. Rubber stocks at the end of May fell by 2.5% to 144,544 tonnes from Apr.

 

Rubber futures on TOCOM were generally higher but failed to break the 255 yen per kg resistance.

"There's not enough buying power and the volumes are also quite low today. It's been trying to break 255 yen in the last 2 days but without success," said a dealer in Thailand's southern city of Hat Yai.

Some dealers are likely to adjust their positions ahead of the 3-day weekend in Japan, leaving the market at the mercy of movements in the yen and other commodities.

Raw material prices have dropped 16% in the past 2 months on increasing supply.

 

Rubber futures on TOCOM turned higher as an easing Japanese yen and expensive oil prices
spurred buying. The benchmark, most distant Dec '07 contract climbed 0.9 yen from the previous day to 252.2 yen per kg at the close.

A weaker yen often attracts buying by domestic investors as it inflates yen-based TOCOM commodity prices.

TOCOM rubber was also supported by high oil prices, which encourage users to shift from petrochemical product SR to NR.

London Brent crude settled down 96 US cents at US$75.44 a barrel on Wednesday, a day after hitting an 11-month high of US$76.63.

"Higher oil prices, a softer yen and falling rubber stocks supported TOCOM," a dealer said.

Crude rubber stocks held at Japanese warehouses fell 3.7% to 15,179 tonnes by Jun 30 from 15,756 tonnes on June 20, the Rubber Trade Association of Japan said.

 

Rubber futures on TOCOM closed lower Wednesday, losing the morning gains to renewed selling after a brief recovery. Selling became dominant toward the close, reflecting the yen's renewed rise against the dollar. The benchmark, most distant Dec '07 contract settled at 251.3 yen per kilogram, down 1.8 yen from Tuesday. Still cannot rise above 200-day MA.

"But technical sentiment was not good as the stronger yen weighed on prices," a dealer said.

A stronger yen makes dollar-based commodities such as TOCOM rubber cheaper for investors.

In the physical market, rubber prices edged higher in brisk trade, tracking the TOCOM rise.

"Prices have hit bottom and should pick up this week because demand is still strong and supply could drop over the next week due to more rain," a trader said.

Most of the buying interest was from Japan, China and Europe, traders said.

Heavy rains expected to hit Thailand's Andaman coastal areas in the next week could affect supply of rubber sheet from the world's biggest rubber exporter.

 

Rubber futures on TOCOM generally extended gains Tuesday morning, drawing renewed buying in late trading. The benchmark, most distant Dec '07 contract settled at 253.1 yen per kg, up 1.5 yen from the previous day.

 

GMG's price moves in correlation with rubber futures.

Rubber futures on TOCOM turned upward Monday, drawing renewed buying toward the end of the session. The benchmark, most distant Dec '07 contract climbed to an intraday high of 251.6 yen per kg at the close, gaining 6.9 yen from Friday. Next resistance is the 200-day MA.

On the physical market, rubber prices were mostly unchanged, although more Chinese buyers were in the market for prompt shipment, traders said.

"The TOCOM trend was still bearish and most buyers believed that physical prices should remain low," a trader in Thailand's Hat Yai rubber centre said.

Physical prices were not expected to fall sharply this week as rain in Thailand's south, the county's main rubber growing area, disrupted tapping.

Supplies in Indonesia were improving as the dry season ended in northern Sumatra, but
rubber trees still needed time to rejuvenate, traders said.

"Supply in Indonesia is around 80% OK right now. If the weather is fine, supply should get back to normal in a few weeks," an Indonesian trader said.

 

how about GMG?any comment?

 

Rubber futures on TOCOM took a sharp downturn Friday, hit by a late bout of selling. The most active contract for Dec delivery on TOCOM closed at the morning session at 244.7 yen per kg, down 4.8 yen from the previous close. The Dec contract sank to a new lifetime low of 242.8 yen in late trading.

Hitoshi Inagawa, senior manager at Yutaka Shoji Co. Ltd., said a weak outlook for further forward months is keeping the market in backwardation.

"As we expect a seasonal inflow of supplies, nearby months should come under pressure. But that's not the case now," he said.

"Instead, a bearish technical outlook is believed so widely that it keeps the distant month from posting a handsome recovery after the sell-off," Inagawa said.

Some analysts said without a revival of buying from short-term investment funds, the Dec TOCOM contract would remain below its 200-day MA. On Thursday it closed below the 200-day MA, or 254.6 yen, for the 6th straight session.

 

Tokyo rubber futures were steady to higher on Thursday, as investors held onto views that the Tokyo market was in a correction phase after touching a 10-month low earlier this week. The benchmark, most distant Dec '07 contract settled at 249.5 yen per kg, up 1.8 yen from the previous day.

"It's possible the market could be bottoming out after heavy selloffs since last week," said Hiroyuki Kikukawa, associate director at Nihon Unicom Inc.

Kikukawa said the market could have entered a corrective phase, but the key contract still faces a tough technical barrier at around 256 yen a kg.

The market also remains weak amid views that more physical supplies are on the way from Thailand in the near future, he added, and due to speculation that demand from China may not be as strong as in the last two years.

Some traders said prices could come down if weather conditions continue to improve, leading to an increase in supplies.

 

chendes,

Its a balance sheet item........a reducion of current assets (cash) and liabilities when its paid. However, if there is interest charge which have not been captured in previous P&L, then this interest charge will show as 'finance cost'.

 

shplayer,

How will its payment of $12.6m to settle Electro Magnetics' claim affect its profit? Thanks.

 

The benchmark, most distant Dec '07 contract on TOCOM was largely unchanged, up 0.5 yen from Tuesday.

But rubber supply is expected to recover in coming weeks as it is typically the season when rubber tapping is in progress, possibly capping the key Dec contract's topside around 260 yen, traders said.

"The basic scenario now is that Thailand will likely be forced to sell in a decline later this year as supplies recover. But nothing is for sure yet," said a manager at a Japanese brokerage.

Traders said the situation in the physical market remained the same as rubber users were mostly reluctant to buy at prices higher than the TOCOM market and that mixed signals in other commodities markets offered little help.

In producing countries, the price of tyre-grade rubber was mostly unchanged. But improving supplies were likely to put pressure on the physical market in coming days.

Analysts said both Japanese and Chinese users have been hesitant to place bids for shipments as they prefer using inventories at home given higher prices offered in producing countries.

 

Crude rubber stocks held at Japanese warehouses fell 5.8% to a fresh 5-month low of 15,756 tonnes by Jun 20 from 16,717 tonnes on Jun 10, the Rubber Trade Association of Japan said on Tuesday.

The latest level was the lowest since Jan 10, but it was 6.8% above the year-earlier level of 14,692 tonnes.

Rubber shipments from producing countries, such as the world's top supplier Thailand, tend to shrink around this time of the year, usually supporting prices.

But Japanese rubber futures prices were under heavy downward pressure from bearish technical trends and receding supply concerns, Tokyo traders said.

 

Could be up due to a rebound in TOCOM rubber futures after it come close to the year's low. Need to breakout of the channel, as shown in the chart by Nostradamus, to convince me of the uptrend.

Tokyo rubber futures rose for the 1st time in 6 sessions on Tuesday as bargain-hunting followed after a failed attempt to test a 5-month low marked the previous day. A recovery in supply earlier this week had knocked down physical rubber prices and triggered stop-loss selling on TOCOM, especially by retail investors, traders said.

The benchmark TOCOM rubber contract for Dec delivery closed at 247.2 yen a kg (still below 200-day MA), up 0.6 yen from the previous close. This was still above Monday's low of 242.9 yen, which was the lowest for any benchmark since Jan 10 and roughly represents a half-way retreat from a 114-yen rally earlier this year from a Nov low. This year's low of 235.8 yen was set on Jan 8

"A selling climax is over for now," said a trader at a Tokyo brokerage. "Most of the speculative positions were closed off, and that helped the market to reverse the downturn," he said.

Firmer oil prices also lent support to the Tokyo market. U.S. crude oil traded at US$70.89 a barrel, near a 10-month high marked on Monday, amid concerns about a decline in global oil inventories.

But analysts said a seasonal recovery in rubber supply in coming months would cap the topside around 260 yen.

"Concerns on the fundamental side are that it is typically the season when supplies are on the rise and an approaching summer holiday means a summer break in demand from tyre makers," an analyst at another Tokyo brokerage said.

TOCOM rubber remained bearish on the charts in the long run, with the key contract staying below its 200-day MA for the 4th day in a row. The market last week broke through below the 200-day MA for the first time since early Jan.

Better weather in producing countries in the past few days has eased supply concerns and weighed on physical rubber prices, traders said.

Bids for Indonesia's SIR20 grade were reported late on Monday but many consumers were likely to wait for prices to fall further before entering the market, dealers in Singapore said.

 

GMG has put up a very STRONG show (at the last 5 mins) today.