Spot rubber prices surge to new record-expexted to hit 150 in near future

Spot rubber prices surge to new record-expexted to hit 150 in near future

Kottayam, March 11

Spot rubber prices rose to a new record on Thursday. The market gained on supply concerns as traders and speculators remained extremely aggressive on sheet rubber. The grade flared up to Rs 146 from Rs 144.50 a kg on fresh buying and short covering. The undercurrent was bullish and the market is expected to hit Rs 150 a kg for RSS 4 in the immediate future.

Futures firm

The March futures firmed up to Rs 146.40 (144.73), April to Rs 150.75(149.97), May to Rs 154.90 (153.57) and June to Rs 158 (156.51) a kg for RSS 4 on National Multi Commodity Exchange (NMCE). RSS 3 improved with the March futures rising to ¥293 (¥289.6) (Rs 147.65), April to ¥291.9 (¥289.7), May to ¥292.9 (¥287.8), June to ¥291.6 (¥289.2) and July to ¥291.1 (¥290.4) a kg, while the August futures slipped to ¥291 (¥292) during the day session on the Tokyo Commodity Exchange. RSS 3 weakened to Rs 148.59 (149.30) a kg on Singapore Commodity Exchange (SICOM).

Spot prices were (Rs/kg): RSS-4: 146 (144.50); RSS-5: 144 (142.50); ungraded: 143 (141.50); ISNR 20: 143 (142.50) and latex 60 per cent: 95 (94).


Ashok Leyland plans to import radial tyres
Production drops by 20%.


New Delhi, March 11

Plagued by a continuing shortage of truck and bus radials, the second biggest domestic commercial vehicle (CV) maker, Ashok Leyland, now plans to import the tyres and has sought a licence from the Government.

Radial tyre shortage in the commercial vehicles industry is now in its fourth month and has led the company to rein in production by almost 20 per cent, even though demand is at an all-time high.

This has forced it to search for alternate supply through imports, a first for the company.

Approval sought

“We have applied for a licence from the Government for importing truck/bus radials, but haven't been able to import them yet. Once we get the approval, we will look at various markets like China and Thailand.

“The shortage is happening for the last 3-4 months and there seems to be no solution in the near-term,” Mr Vinod Dasari, Chief Operating Officer, Ashok Leyland told Business Line.

Truck and bus radial tyre imports had been put under the ‘Restricted List' in November, 2008 by the Government.

This meant that importers had to specifically seek Government permission, which would be given on a case-to-case basis.

Dumping duty

To add to this, to protect the domestic tyre industry, the Government had put an anti-dumping duty on truck and bus radial tyre imports from China and Thailand, with effect from February 19 this year.

This was done despite protests from the auto industry, aftermarket tyre dealers and truckers' associations.

The notification of the anti-dumping duty has led to an increase in the cost of an imported tyre set (tyre+tube+flap) by Rs 1,140, to Rs 4,500.

Tata Motors too

Tata Motors, the biggest domestic CV maker, had earlier reported a 10-15 per cent drop in production due to similar reasons.

Tata Motors officials said that the company was importing tyres from various countries such as China.

Dependence on rubber imports on the rise
The latest data with the Rubber Board underlines the growing gap between demand and domestic supply of the product.

There has been a 122 per cent rise in import of natural rubber between April 2009 and this February, compared to the corresponding period last year — 157,980 tonnes against 71,025 tonnes. The figures also raise a question on the Board’s own estimates. It had originally projected a production of 867,000 tonnes and consumption of 881,000 tonnes for 2009-10. Their latest data show the year’s domestic output would be only 827,000 tonnes, against a total consumption of 931,000 tonnes..(BS) http://www.business-standard.com/india/news/dependencerubber-importsthe-rise/388273/

Bad News For Tire Makers

The OPEC of rubber? There is such a thing, and it is about to get some teeth.

The International Rubber Consortium, a cartel of the world's three largest natural-rubber exporters—Thailand, Indonesia and Malaysia—has asked Vietnam to join the club. IRCo already produces 75% of the world's natural rubber, but without Vietnam's rubber plantations, the group lacks clout.

This became evident as rubber prices plunged to a five-year low in 2008. IRCo's response—to reduce exports by 700,000 metric tons—was undercut by Vietnam's producers, which actually boosted output last year. (WJ) http://online.wsj.com/article/SB10001424052748703791704575114021586412174.html?mod=WSJ_Heard_LEFTTopNews