Tyre-makers seek ban on rubber futures

Press Trust of India, March 29, 2010 (New Delhi)

Hit by the steep rise in natural rubber prices, the Automotive Tyre Manufacturers Association has urged Prime Minister Manmohan Singh to ban futures trading of the commodity and allow duty-free import of at least 2,00,000 tonne of the raw material.

The industry body in a letter to the Prime Minister, also urged either reduction in import duty on natural rubber to 7.5 per cent from existing 20 per cent or doubling of customs duty on imported tyre to 20 per cent to help domestic manufacturers.

"Rubber growers are hoarding and trading more and more in speculation, and thereby increasing prices. There is also a big demand-supply gap," ATMA chairman Neeraj Kanwar said.

In his letter to Singh on March 26, Kanwar urged the PM to ban futures trading till "volatility in natural rubber prices is contained and availability situation improves". He said domestic tyre firms are having a tough time and their margins are under pressure due to rise in rubber prices.

Prices have surged by over 60 per cent in the last seven months and hovering around Rs 155 a kg at present, which was more than double the average price in March, 2009. Market reports hint that the prices may rise further to Rs 175-180 a kg in the near future.

"Along with the rising rubber prices, availability is also a matter of serious concern, and so tyre manufacturers should be allowed duty-free import of at least 2,00,000 tonne on a priority basis," he said.

In his letter, Kanwar said, "price increase of Re 1 translates into an additional financial burden of Rs 60 crore for tyre industry."

Stating that tyre manufacturers will have to pass on the additional burden to consumers in coming days, he said, "the industry would want to increase tyre prices by 20-25 per cent immediately," Kanwar said, and recalled that there was a 5 per cent hike in January, followed by 2 per cent in February.

"Another round of hike of 2 per cent will happen in April," Kanwar informed.

With cheap imports from China hurting domestic firms, the association wants to see import duty on tyres increased to 20 per cent from the present 10 per cent.

"China has already taken immediate and effective steps by abolishing customs duty on compound rubber imports and reduction in duty on natural rubber imports, thereby helping its tyre and rubber goods manufacturing industry maintain competitiveness," the letter said.

Meanwhile, the demand for tyres from the vehicle makers are gradually increasing as the domestic market has rebounded with record sales. Kanwar said under the prevailing circumstances, the tyre-makers would find it difficult to meet the demand of the booming auto industry.

(NDTV) http://beta.profit.ndtv.com/news/show/tyre-makers-seek-ban-on-rubber-futures-32637

India rubber seen hitting new record peaks

OUTLOOK-India rubber seen hitting new record peaks

MUMBAI, March 29 (Reuters) - Indian rubber prices are likely to set new record highs this week on firm global markets and a shortfall in production due to a drought-like situation in the biggest growing region, traders and analysts said on Monday.

"Summer is very hot this year and it is hampering tapping process," said V. N. Viswamohan Prabhu, a spot trader based in Kochi in southern Kerala state.

The state is the biggest producer of the rubber and currently experiencing drought like situation in many districts, its revenue minister told the state assembly earlier this month.

The key Tokyo rubber futures contract hit an 18-month high on Monday, as firmer oil prices and tight supply underpinned sentiment which turned positive after prices topped major resistance of 300 yen last week. See [ID:nTOE62S078]

The benchmark April contract NMRUJ0 on the National Multi-Commodity Exchange (NMCE) hit a high of 15,935 rupees per 100 kg on Monday, the highest level for near-month contract since futures trade was introduced in 2003.

Spot price of the most traded RSS-4 (ribbed smoked sheet) rubber hit a record high of 15,550 rupees in Kottayam, Kerala, as per data compiled by the Rubber Board. The spot price has risen by nearly ten percent so far in March.

"Despite higher prices tyre markers are still buying. Market may set new high this week," Prabhu said.

Usually rubber supplies shrink in summer season in India. In 2009/10, output in the world's fourth biggest producer is expected to drop 4 percent to 830,000 tonnes from 864,500 tonnes a year ago

Spot rubber gains on short supply

Kottayam, March 30

Physical rubber prices made further gains on Tuesday. The market opened better quoting sheet rubber at Rs 158 a kg but the grade shed the morning gains partially to close at Rs 157 (156) a kg following the declines in domestic futures on late trades. Major manufacturers continued to remain inactive prior to the financial year closing but the market made all-round gains amidst short supply.

Futures weak

The futures weakened with April dropping to Rs 156.57 (158.88), May to Rs 159.84 (161.91), June to Rs 159.60 (161.88) and July to Rs 158.71 (160.22) a kg for RSS 4 on National Multi Commodity Exchange (NMCE). RSS 3 improved with the April futures rising to ¥331.8 (¥331.7) and May to ¥327.8 (¥327.1), while the June futures slipped to ¥319.4 (¥320.3) and July to ¥313.3 (¥315.8) a kg during the day session on Tokyo Commodity Exchange. RSS 3 improved to Rs 157.52 (157.06) a kg on Singapore Commodity Exchange (SICOM). The grade firmed up to Rs 158.05 (156.85) a kg at Bangkok.

Spot prices were (Rs/kg): RSS-4: 157 (156); RSS-5: 155.50 (154.50); ungraded: 154 (153.50); ISNR 20: 154 (153) and latex 60 per cent: 100 (100).

Tyre makers seek PM’s help to cool rubber prices

Thiruvananthapuram: Worried over natural rubber price jumping to Rs 155 a kg, industry outfit the Automotive Tyre manufacturers Association has sought the intervention of Prime Minister Manmohan Singh to ease natural rubber availability in the country. In a memorandum to Prime Minister, ATMA has sought zero-duty rubber imports and ban on futures trading. (FE)

http://www.financialexpress.com/news/Tyre-makers-seek-PM-s-help-to-cool-rubber-prices/597768/

Asian physical rubber prices - March 31

BANGKOK, March 31 - Asian physical rubber prices were higher on Wednesday, supported by tight supply and rising futures prices on the Tokyo Commodity Exchange, dealers said.

The benchmark Thai rubber price was offered at a record high of $3.52 per kg, breaking the previous record of $3.50 set this week.

Rubber reached levels around $3.30 per kg 58 years ago at the time of the Korean War. It went above that level in March this year and has continued to move higher as demamd is strong and supply is falling for seasonal reasons. (Alibaba.com) http://news.alibaba.com/article/detail/chemical/100270345-1-table-asian-physical-rubber-prices--.html