Spot rubber rules weak
Kottayam, April 29
Spot rubber weakened further on Thursday. Heavy losses in the domestic futures dampened the market mood and most of the traders were hesitant to expand their commitments afraid of further fall in prices. Sheet rubber surrendered to Rs 167 from Rs 168 a kg on buyer resistance. The volumes were dull and the losses were limited owing to tight supplies.
Futures weak
The May futures for RSS 4 moved down to Rs 164.20 (166.30), June to Rs 166.80 (168.58), July to Rs 165 (167.22) and August to Rs 162.75 (164.26) a kg on National Multi Commodity Exchange (NMCE). RSS 3 improved marginally to Rs 175.85 (175.57) a kg on Singapore Commodity Exchange (SICOM). The grade slipped to Rs 179.20 (179.49) a kg at Bangkok.
The Tokyo Commodity Exchange (TOCOM) remained closed on account of Showa Day.
Spot rates were (Rs/kg): RSS-4: 167 (168); RSS-5: 165 (166); ungraded: 162.50 (163.50); ISNR 20: 159 (160) and latex 60 per cent: 106 (106)
Rubber market news
Tyre cos worry over rubber supplies
Posted: 28 Apr 2010 09:42 PM PDT
Thiruvananthapuram: Rising demand has put tyre makers in a precarious situation as on one hand revenues are simultaneously increasing because of increased sales, but at the same time their raw material demand has stretched the already low natural rubber supplies.
With tyre production in the first 11 months of 2009-2010 financial year rising by 17%, purchase divisions of major tyre companies are grappling to meet the fast-expanding raw material needs, especially of natural natural rubber. “Some tyre companies have already passed on impact of rising input cost to consumers in January and March and it looks that some are poised to raise prices again in May,” Vaishali Jajoo, automobile analyst at Angel Broking said, adding that a way to fight input cost pressure is debottlenecking, which most tyre firms are already doing.
Tractor tyre demand, an indicator of rising purchasing power in rural economy, is the main factor behind increasing tyre production. Production of tractor front and tractor rear tyres went up by 30% and 24% respectively, according to the latest statistics released by Automotive Tyre Manufacturers Association (ATMA).
Tyre production touched 87.8 million units in the first 11 months of last financial year, a growth of 17% over 74.7 million units produced during the same period of previous financial year. Good monsoon this year could translate into better tractor tyre sales making tyre companies worry as to whether they will be able to procure adequate quantities of raw material.
“Rubber unavailability is likely to be a big roadblock to the growth momentum of tyre industry,” Neeraj Kanwar, Chairman ATMA said.
Tyre companies said that its not just the historic high price of Rs 170 per kg (more than 80% the average price of Rs 95 a Kg in April 2009) that’s worrying them, but sheer unavailability of natural rubber that is more critical.
Kanwar said, “growers are hoarding rubber and not selling as spot market prices are rising almost daily by Rs 2-3 per kg.” Tyre companies have also questioned the natural rubber production data compiled by state-run Rubber Board. “Its a mystery why the Board makes supply projections too pink to be true,” says Rajiv Budhraja, Director General, ATMA.
ATMA is gearing up to raise the issue of over-optimistic rubber production data at the board of directors meeting on May 12.
(financialexpress.com)
World rubber output to grow 6.2% in ’10
Posted: 28 Apr 2010 09:34 PM PDT
Thiruvananthapuram: Global rubber supply is likely to grow by 6.2% in 2010, according to the crop outlook report by Malaysia-based Association of Natural Rubber Producing Countries (ANRPC).
“From 8,821 million tonne in 2009, supply of natural rubber in ANRPC member countries is now anticipated to grow at a rate of 6.2% in 2010, touching 9,367 million tonne,” Djoko Said Damardjati, secretary-general, ANRPC said. ANRPC accounts for about 94% of the global supply of natural rubber.
Last year, world rubber supply had shrunk 3.6% to 8.821 million tonne, mainly due to Indonesia ‘s downward revision of stocks. “A faster-than-expected global economic recovery” and “resultant acceleration in natural rubber demand” are major drivers of rubber market in short and medium term, Djoko Said Damardjati said, in ANRPC’s April Bulletin.
Besides the rising consumption in China, India and Malaysia, a section of the tyre manufacturing industry, which have been shying from coming into the market in March and April, are expected to make a comeback from next week.
“They had postponed their purchases in expectation of comfortable availability after the wintering season,” the ANRPC Bulletin, that studies the trends in first quarter of 2010, to project the outlook for the whole year, showed.
Analysts indicate three key reasons, why the supply may not feed natural rubber demand is that age of existing yielding trees in major producing countries is likely to exert a downward pressure on average yield.
Secondly, higher number of small holdings in rubber limits flexibility to enhance yield by short-term measures and finally, rubber production already suffers from labour shortage.
As global economy gets back on its leg, creation of more opportunities in industrial and tertiary sectors is likely to aggravate the shortage of workers in rubber estates.
However, most analysts believe that in the long-term, there is no cause for pessimism. The net effect of two opposite processes would decide the supply from 2012 onwards.
(financialexpress.com)
Friday, April 30, 2010
Thursday, April 29, 2010
Rubber Prices to Stay ‘High’ Until June, IRCO Says
Rubber Prices to Stay ‘High’ Until June, IRCO Says
April 28 (Bloomberg) -- Natural rubber prices will remain “high” until at least June as supplies from the three biggest producing countries remain tight and demand for tires from automakers expands, a producers’ group said.
“Prices will sustain high levels in the first half of this year, with increasing car sales and positive economic indicators,” Abdul Rasip Latiff, chief executive officer of the International Rubber Consortium Ltd., said in an interview. The consortium represents the three biggest producing nations.
The average physical price of natural rubber from Thailand, Indonesia and Malaysia will be about $3.20 to $3.30 per kilogram in the second quarter, Abdul Rasip said. The price has averaged about $3.19 this year.
Futures in Tokyo have gained 11 percent this year after more than doubling in 2009 as the global economy recovered from the worst postwar recession and government incentive programs in China and the U.S., the two biggest auto markets, revived vehicle sales. Limited supply this year during the annual low- output season has driven cash prices to all-time highs.
The benchmark price, excluding freight and insurance, of Thai RSS-3 grade rubber for May delivery declined to 130.05 baht ($4.03) per kilogram from a record 130.55 baht yesterday, according to the Rubber Institute of Thailand.
The auctioned price of RSS-3 fell 1.2 percent to 118.55 baht as some buyers shifted to cheaper supplies from Indonesia, the institute said today.
‘Too Volatile’
Rubber for October delivery on the Tokyo Commodity Exchange, the most-active contract, fell 1.9 percent to 305.8 yen ($3.23) a kilogram, the lowest closing price since March 25. The contract slumped 4.7 percent in the past two days. The May- delivery contract dropped 0.4 percent to settle at 428 yen after surging 20 percent in the previous six days.
“The near-term contract will be influenced by the low supply,” Roka Komiya, a trader at Marubeni Corp., said by phone from Singapore. Prices will stay around current levels through the end of June if supply doesn’t pick up, he said.
The market has been “too volatile,” Yium Tavarolit, IRCO’s economist, said in an interview in Bangkok yesterday. “That makes it very difficult for all stakeholders to manage costs, as they don’t know where prices will be,” he said.
IRCO represents growers and exporters in Thailand, Indonesia and Malaysia, which harvest about 7 million metric tons a year, equivalent to about 70 percent of the world’s natural rubber output.
Yields Falling
Supply, which typically improves after the end of the low- output period in April, may continue to be affected because of low yields, the Association of Natural Rubber Producing Countries said in an April newsletter. Existing trees in the biggest producing nations were mostly planted during 1980s and yields are falling, the association said.
Thai rubber production in April and May this year is likely to be similar to last year, with delayed rainfall threatening to cut output in May, according to the Thai Rubber Institute. Production last year totaled 200,000 tons in April and 190,000 tons in May.
Tight supplies will likely ease after the middle of May as increased production begins to appear on the market, Abdul Rasip said. The three biggest producers enter a low-output season from February to April every year, when rubber trees shed leaves and latex output slows.
‘Remain Tight’
“Although the supply will increase, it will remain tight compared with growing demand,” Abdul Rasip said.
Passenger car sales in China rose 76 percent to 3.32 million units in the first quarter, according to the China Association of Automobile Manufacturers. Bridgestone Corp., the world’s biggest tire maker, plans to boost production in China by 43 percent this year to 100,000 metric tons and increase output by 16 percent in Japan.
Natural rubber consumption may rise by 9 percent in 2010 to about 10.4 million tons, according to the International Rubber Study Group’s March forecast.
Imports by China will increase if the country revalues its currency, “as they’ll pay less yuan to buy rubber, and that is good for exporting countries,” Yium said. A stronger yuan would make rubber imports cheaper, boosting competition among tire producers.
China may allow its currency to appreciate by June 30 to curb inflation, a Bloomberg survey of analysts showed this month.
Political unrest in Thailand, the largest producer and exporter, hasn’t affected rubber production or exports, Abdul Rasip said. “We don’t see any problem,” he said.
Antigovernment protesters have demonstrated for almost seven weeks, paralyzing the capital Bangkok, where recent violence killed 26 people. Most Thai rubber is produced in the south of the country.
Spot rubber turns weak
Kottayam, April 28
Physical rubber prices turned weak on Wednesday. The market lost ground following the declines in the domestic and international rubber futures. Sheet rubber dropped to Rs 168 from Rs 169 a kg mainly on buyer resistance. There has been no selling pressure on any grade as supply concerns continued to haunt the main marketing centres.
Futures decline
The May futures declined to Rs 166.30 (168.16), June to Rs 168.57 (170.53), July to Rs 167.05 (169.63) and August to Rs 164.40 (166.59) a kg for RSS4 on National Multi Commodity Exchange. The May futures weakened to ¥428 (Rs 203.04) from ¥429.5, June to ¥362 (¥364.5), July to ¥335 (¥340.2), August to ¥318 (¥324), September to ¥310 (315.9) and October to ¥305.8 (¥311.8) a kg for RSS 3 during the day session on Tokyo Commodity Exchange. RSS 3 fell sharply to Rs 175.57 (179.42) a kg on Singapore Commodity Exchange (SICOM). It (spot) closed at Rs 179.49 (180.12) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 168 (169); RSS-5: 166 (167); ungraded: 163.50 (165); ISNR 20: 160 (161.50) and latex 60 per cent: 106 (106).
Rubber Declines to One-Month Low as Debt Concerns Cut Appeal
April 28 (Bloomberg) -- Rubber tumbled to a four-week low after credit-rating downgrades of Greece and Portugal stoked concern that debt-laden nations may be moving closer to default, prompting an increase in risk aversion among investors.
Futures in Tokyo fell 1.9 percent to 305.8 yen a kilogram ($3,278 a metric ton), the lowest closing price since March 25, extending a decline from a 21-month high of 338.5 yen reached on April 16 and heading for its worst monthly performance since September.
Asian stocks fell, extending a global rout, after the rating downgrades spurred concern Europe’s debt crisis may derail the global economic recovery.
“Rubber came under pressure along with other commodities as concern about European debt problems spurred investors to cut their holdings of risk assets,” Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo, said today.
Greece’s credit rating was cut three steps to BB+, or junk, by Standard & Poor’s, the first time a euro member has lost its investment grade since the currency’s 1999 debut.
Standard & Poor’s also warned that bondholders could recover as little as 30 percent of their initial investment if the country restructures its debt. The Greek move came after the rating company reduced Portugal by two steps to A-.
“Concerns about European budget issues are increasing again and that’s discouraging people from putting their money into risky assets,” said Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc. in Tokyo. The MSCI Asia Pacific Index fell 1.6 percent to 125.11 as of 10:22 a.m. in Tokyo.
Rubber futures have gained 11 percent this year as the global economy recovered from the worst postwar recession, boosting raw material demand. The market was also supported by a seasonal decrease in supply from Thailand, the largest producer.
Cheaper Supplies
The free-on-board price, which excludes freight and insurance, of Thai RSS-3 grade rubber for May delivery fell to 130.05 baht ($4.03) per kilogram from a record 130.55 baht touched yesterday, according to the Rubber Institute of Thailand.
The auctioned price of RSS-3 fell 1.2 percent to 118.55 baht a kilogram as some buyers shifted to cheaper supplies from Indonesia, the institute said.
The rubber market will stay supported by a faster-than- expected global economic recovery and by accelerating growth in demand, the Association of Natural Rubber Producing Countries said in an April newsletter.
Natural rubber prices will remain high until at least June as supplies from the three biggest producing countries remain tight and demand for tires from automakers expands, Abdul Rasip Latiff, chief executive officer of the International Rubber Consortium Ltd., said in an interview yesterday.
The average physical price of natural rubber from Thailand, Indonesia and Malaysia will be about $3.20 to $3.30 per kilogram in the second quarter, “based on fundamentals,” Abdul Rasip said. The price has averaged $3.19 this year,
September-delivery rubber on the Shanghai Futures Exchange tumbled 2.3 percent to settle 23,385 yuan ($3,426) a ton.
(businessweek.com)
High input cost likely to send tyre prices north
Posted: 27 Apr 2010 04:14 PM PDT
Mumbai: Tyre manufacturers Bridgestone India, Apollo Tyres and Ceat are looking to raise prices. Over the last two quarters, rubber prices have risen 60-70% and are hovering at Rs 150 per kg. The tyre price increase will be the third in four months. Since January, tyre prices have gone up 8-10%.
Bridgestone India said it had increased prices by 3.5% (cost to the dealer) starting today. Hiromi Tanigawa, managing director, Bridgestone India Private Ltd, said:
“It will all depend upon the raw material prices. If there is an increase in the raw material prices, we will also increase our prices and pass on the burden further.” Apollo Tyres and Ceat plan an increase by May.
Rubber comprises 40% of the cost of a tyre. Any fluctuation in the commodity impacts the cost of production and margins of the makers, said a Mumbai-based analyst. “The makers have been of late increasing prices in tandem with the increase in the raw material prices,” she added. The makers have managed this on the back of strong demand in the market and supply-demand mismatch on the final product side.
“Tyre makers are operating at 100% capacity utilisation. Citing the hardening rubber prices, the margins of the tyre makers are expected to remain under pressure, but will smoothen up in the short-term,” said Vaishali Jajoo, an auto analyst with Angel Broking.
Auto makers like Mahindra & Mahindra (M&M) and Tata Motors, among others, have lately pointed out the mismatch in supply from component makers, specifically from tyre makers. Though they had hinted on the improving situation, there is still a long way before balance is maintained between supply and demand.
(financialexpress.com)
Demand-driven bullish phase traps rubber
Posted: 27 Apr 2010 04:12 PM PDT
Kochi April 27
A faster than expected global economic recovery and the resultant acceleration in demand for natural rubber are likely to dominate sentiments in the global rubber markets in the short to medium-term. Also, global demand is likely to receive a further boost as a section of tyre manufacturing industry which stayed away during the wintering months are expected to re-enter expecting better availability in the coming months, the Association of Natural Rubber Producing Countries (ANRPC) has said.
Over 45 per cent of the global demand for rubber comes from China, India and Malaysia. The data on import and consumption of rubber in these countries during the first quarter this year reveal that natural rubber has already entered into a demand-driven bullish phase. While consumption in India rose 12.8 per cent, imports have soared by 124 per cent. More demand is expected in the months to come as the installed capacity to manufacture bus and truck tyres is poised to more than double, the Automotive Tyre Manufactures Association has pointed out.
“The likelihood of prices slipping this year is quite remote. In fact, as demand firms up in the months to come, prices are likely to improve further in the coming days.
Indications are that global spot prices could breach the $4-mark in the not-too-distant future” said Mr N. Radhakrishnan, former President of the Cochin Rubber Merchants Association.
Consumption in China increased 29 per cent during the first quarter, while natural rubber imports soared 70 per cent. Malaysia has posted 13 per cent growth in consumption, while imports rose 28 per cent.
Like India, Malaysia is also fast becoming a net importer of natural rubber. Preliminary indications are that Malaysia imported 1,83,000 tonnes of rubber in first quarter.
In the days to come, Malaysian demand is likely to be fuelled by greater demand from the domestic glove industry as the US has stepped up its health bill by $ 940 billion.
Global production
Even as consumption and imports into the major-consuming countries have registered double-digit growth, global production is expected to rise moderately by 6.2 per cent during the current year, the ANRPC that accounts for 94 per cent of the global production and supply of natural rubber said. However, this is better than the 3.6 per cent fall recorded last year.
Global production is expected to rise modestly from 8.821 million tonnes (mt) in 2009 to 9.367 mt in 2010. Most countries, including India, expect a moderate increase in production, while Malaysia alone expects production to grow faster by 16 per cent. Increased production is expected from growth in yielding area under rubber. Yielding area in India is expected to go up by 6,000 hectares, while China is expected to record a growth of 22,000 hectares, Vietnam (23,000 hectares) and Cambodia (10,000 hectares).
Labour shortage is not only becoming rampant in the growing regions of South India but is also extending to countries such as Malaysia. ANRPC reported that 85,000 hectares of mature rubber area which are lying untapped in Malaysia are now being tapped as prices have risen to all-time highs.
Although availability usually improves in April after the winter dormancy, the Association pointed out that it could be different this year. As prices have remained high, farmers have not been cutting down old trees and replanting with improved varieties in recent years and this is likely to affect the yield this year as well.
Limited options
Moreover, farmers have limited options of increasing yield as high prices had ensured that they extracted the maximum yield from their trees. Finally, consumers who have stayed away from the market in the past couple of months on account of high prices and low arrivals are likely to re-enter the market and prices could firm up further.
(thehindubusinessline.com)
April 28 (Bloomberg) -- Natural rubber prices will remain “high” until at least June as supplies from the three biggest producing countries remain tight and demand for tires from automakers expands, a producers’ group said.
“Prices will sustain high levels in the first half of this year, with increasing car sales and positive economic indicators,” Abdul Rasip Latiff, chief executive officer of the International Rubber Consortium Ltd., said in an interview. The consortium represents the three biggest producing nations.
The average physical price of natural rubber from Thailand, Indonesia and Malaysia will be about $3.20 to $3.30 per kilogram in the second quarter, Abdul Rasip said. The price has averaged about $3.19 this year.
Futures in Tokyo have gained 11 percent this year after more than doubling in 2009 as the global economy recovered from the worst postwar recession and government incentive programs in China and the U.S., the two biggest auto markets, revived vehicle sales. Limited supply this year during the annual low- output season has driven cash prices to all-time highs.
The benchmark price, excluding freight and insurance, of Thai RSS-3 grade rubber for May delivery declined to 130.05 baht ($4.03) per kilogram from a record 130.55 baht yesterday, according to the Rubber Institute of Thailand.
The auctioned price of RSS-3 fell 1.2 percent to 118.55 baht as some buyers shifted to cheaper supplies from Indonesia, the institute said today.
‘Too Volatile’
Rubber for October delivery on the Tokyo Commodity Exchange, the most-active contract, fell 1.9 percent to 305.8 yen ($3.23) a kilogram, the lowest closing price since March 25. The contract slumped 4.7 percent in the past two days. The May- delivery contract dropped 0.4 percent to settle at 428 yen after surging 20 percent in the previous six days.
“The near-term contract will be influenced by the low supply,” Roka Komiya, a trader at Marubeni Corp., said by phone from Singapore. Prices will stay around current levels through the end of June if supply doesn’t pick up, he said.
The market has been “too volatile,” Yium Tavarolit, IRCO’s economist, said in an interview in Bangkok yesterday. “That makes it very difficult for all stakeholders to manage costs, as they don’t know where prices will be,” he said.
IRCO represents growers and exporters in Thailand, Indonesia and Malaysia, which harvest about 7 million metric tons a year, equivalent to about 70 percent of the world’s natural rubber output.
Yields Falling
Supply, which typically improves after the end of the low- output period in April, may continue to be affected because of low yields, the Association of Natural Rubber Producing Countries said in an April newsletter. Existing trees in the biggest producing nations were mostly planted during 1980s and yields are falling, the association said.
Thai rubber production in April and May this year is likely to be similar to last year, with delayed rainfall threatening to cut output in May, according to the Thai Rubber Institute. Production last year totaled 200,000 tons in April and 190,000 tons in May.
Tight supplies will likely ease after the middle of May as increased production begins to appear on the market, Abdul Rasip said. The three biggest producers enter a low-output season from February to April every year, when rubber trees shed leaves and latex output slows.
‘Remain Tight’
“Although the supply will increase, it will remain tight compared with growing demand,” Abdul Rasip said.
Passenger car sales in China rose 76 percent to 3.32 million units in the first quarter, according to the China Association of Automobile Manufacturers. Bridgestone Corp., the world’s biggest tire maker, plans to boost production in China by 43 percent this year to 100,000 metric tons and increase output by 16 percent in Japan.
Natural rubber consumption may rise by 9 percent in 2010 to about 10.4 million tons, according to the International Rubber Study Group’s March forecast.
Imports by China will increase if the country revalues its currency, “as they’ll pay less yuan to buy rubber, and that is good for exporting countries,” Yium said. A stronger yuan would make rubber imports cheaper, boosting competition among tire producers.
China may allow its currency to appreciate by June 30 to curb inflation, a Bloomberg survey of analysts showed this month.
Political unrest in Thailand, the largest producer and exporter, hasn’t affected rubber production or exports, Abdul Rasip said. “We don’t see any problem,” he said.
Antigovernment protesters have demonstrated for almost seven weeks, paralyzing the capital Bangkok, where recent violence killed 26 people. Most Thai rubber is produced in the south of the country.
Spot rubber turns weak
Kottayam, April 28
Physical rubber prices turned weak on Wednesday. The market lost ground following the declines in the domestic and international rubber futures. Sheet rubber dropped to Rs 168 from Rs 169 a kg mainly on buyer resistance. There has been no selling pressure on any grade as supply concerns continued to haunt the main marketing centres.
Futures decline
The May futures declined to Rs 166.30 (168.16), June to Rs 168.57 (170.53), July to Rs 167.05 (169.63) and August to Rs 164.40 (166.59) a kg for RSS4 on National Multi Commodity Exchange. The May futures weakened to ¥428 (Rs 203.04) from ¥429.5, June to ¥362 (¥364.5), July to ¥335 (¥340.2), August to ¥318 (¥324), September to ¥310 (315.9) and October to ¥305.8 (¥311.8) a kg for RSS 3 during the day session on Tokyo Commodity Exchange. RSS 3 fell sharply to Rs 175.57 (179.42) a kg on Singapore Commodity Exchange (SICOM). It (spot) closed at Rs 179.49 (180.12) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 168 (169); RSS-5: 166 (167); ungraded: 163.50 (165); ISNR 20: 160 (161.50) and latex 60 per cent: 106 (106).
Rubber Declines to One-Month Low as Debt Concerns Cut Appeal
April 28 (Bloomberg) -- Rubber tumbled to a four-week low after credit-rating downgrades of Greece and Portugal stoked concern that debt-laden nations may be moving closer to default, prompting an increase in risk aversion among investors.
Futures in Tokyo fell 1.9 percent to 305.8 yen a kilogram ($3,278 a metric ton), the lowest closing price since March 25, extending a decline from a 21-month high of 338.5 yen reached on April 16 and heading for its worst monthly performance since September.
Asian stocks fell, extending a global rout, after the rating downgrades spurred concern Europe’s debt crisis may derail the global economic recovery.
“Rubber came under pressure along with other commodities as concern about European debt problems spurred investors to cut their holdings of risk assets,” Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo, said today.
Greece’s credit rating was cut three steps to BB+, or junk, by Standard & Poor’s, the first time a euro member has lost its investment grade since the currency’s 1999 debut.
Standard & Poor’s also warned that bondholders could recover as little as 30 percent of their initial investment if the country restructures its debt. The Greek move came after the rating company reduced Portugal by two steps to A-.
“Concerns about European budget issues are increasing again and that’s discouraging people from putting their money into risky assets,” said Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc. in Tokyo. The MSCI Asia Pacific Index fell 1.6 percent to 125.11 as of 10:22 a.m. in Tokyo.
Rubber futures have gained 11 percent this year as the global economy recovered from the worst postwar recession, boosting raw material demand. The market was also supported by a seasonal decrease in supply from Thailand, the largest producer.
Cheaper Supplies
The free-on-board price, which excludes freight and insurance, of Thai RSS-3 grade rubber for May delivery fell to 130.05 baht ($4.03) per kilogram from a record 130.55 baht touched yesterday, according to the Rubber Institute of Thailand.
The auctioned price of RSS-3 fell 1.2 percent to 118.55 baht a kilogram as some buyers shifted to cheaper supplies from Indonesia, the institute said.
The rubber market will stay supported by a faster-than- expected global economic recovery and by accelerating growth in demand, the Association of Natural Rubber Producing Countries said in an April newsletter.
Natural rubber prices will remain high until at least June as supplies from the three biggest producing countries remain tight and demand for tires from automakers expands, Abdul Rasip Latiff, chief executive officer of the International Rubber Consortium Ltd., said in an interview yesterday.
The average physical price of natural rubber from Thailand, Indonesia and Malaysia will be about $3.20 to $3.30 per kilogram in the second quarter, “based on fundamentals,” Abdul Rasip said. The price has averaged $3.19 this year,
September-delivery rubber on the Shanghai Futures Exchange tumbled 2.3 percent to settle 23,385 yuan ($3,426) a ton.
(businessweek.com)
High input cost likely to send tyre prices north
Posted: 27 Apr 2010 04:14 PM PDT
Mumbai: Tyre manufacturers Bridgestone India, Apollo Tyres and Ceat are looking to raise prices. Over the last two quarters, rubber prices have risen 60-70% and are hovering at Rs 150 per kg. The tyre price increase will be the third in four months. Since January, tyre prices have gone up 8-10%.
Bridgestone India said it had increased prices by 3.5% (cost to the dealer) starting today. Hiromi Tanigawa, managing director, Bridgestone India Private Ltd, said:
“It will all depend upon the raw material prices. If there is an increase in the raw material prices, we will also increase our prices and pass on the burden further.” Apollo Tyres and Ceat plan an increase by May.
Rubber comprises 40% of the cost of a tyre. Any fluctuation in the commodity impacts the cost of production and margins of the makers, said a Mumbai-based analyst. “The makers have been of late increasing prices in tandem with the increase in the raw material prices,” she added. The makers have managed this on the back of strong demand in the market and supply-demand mismatch on the final product side.
“Tyre makers are operating at 100% capacity utilisation. Citing the hardening rubber prices, the margins of the tyre makers are expected to remain under pressure, but will smoothen up in the short-term,” said Vaishali Jajoo, an auto analyst with Angel Broking.
Auto makers like Mahindra & Mahindra (M&M) and Tata Motors, among others, have lately pointed out the mismatch in supply from component makers, specifically from tyre makers. Though they had hinted on the improving situation, there is still a long way before balance is maintained between supply and demand.
(financialexpress.com)
Demand-driven bullish phase traps rubber
Posted: 27 Apr 2010 04:12 PM PDT
Kochi April 27
A faster than expected global economic recovery and the resultant acceleration in demand for natural rubber are likely to dominate sentiments in the global rubber markets in the short to medium-term. Also, global demand is likely to receive a further boost as a section of tyre manufacturing industry which stayed away during the wintering months are expected to re-enter expecting better availability in the coming months, the Association of Natural Rubber Producing Countries (ANRPC) has said.
Over 45 per cent of the global demand for rubber comes from China, India and Malaysia. The data on import and consumption of rubber in these countries during the first quarter this year reveal that natural rubber has already entered into a demand-driven bullish phase. While consumption in India rose 12.8 per cent, imports have soared by 124 per cent. More demand is expected in the months to come as the installed capacity to manufacture bus and truck tyres is poised to more than double, the Automotive Tyre Manufactures Association has pointed out.
“The likelihood of prices slipping this year is quite remote. In fact, as demand firms up in the months to come, prices are likely to improve further in the coming days.
Indications are that global spot prices could breach the $4-mark in the not-too-distant future” said Mr N. Radhakrishnan, former President of the Cochin Rubber Merchants Association.
Consumption in China increased 29 per cent during the first quarter, while natural rubber imports soared 70 per cent. Malaysia has posted 13 per cent growth in consumption, while imports rose 28 per cent.
Like India, Malaysia is also fast becoming a net importer of natural rubber. Preliminary indications are that Malaysia imported 1,83,000 tonnes of rubber in first quarter.
In the days to come, Malaysian demand is likely to be fuelled by greater demand from the domestic glove industry as the US has stepped up its health bill by $ 940 billion.
Global production
Even as consumption and imports into the major-consuming countries have registered double-digit growth, global production is expected to rise moderately by 6.2 per cent during the current year, the ANRPC that accounts for 94 per cent of the global production and supply of natural rubber said. However, this is better than the 3.6 per cent fall recorded last year.
Global production is expected to rise modestly from 8.821 million tonnes (mt) in 2009 to 9.367 mt in 2010. Most countries, including India, expect a moderate increase in production, while Malaysia alone expects production to grow faster by 16 per cent. Increased production is expected from growth in yielding area under rubber. Yielding area in India is expected to go up by 6,000 hectares, while China is expected to record a growth of 22,000 hectares, Vietnam (23,000 hectares) and Cambodia (10,000 hectares).
Labour shortage is not only becoming rampant in the growing regions of South India but is also extending to countries such as Malaysia. ANRPC reported that 85,000 hectares of mature rubber area which are lying untapped in Malaysia are now being tapped as prices have risen to all-time highs.
Although availability usually improves in April after the winter dormancy, the Association pointed out that it could be different this year. As prices have remained high, farmers have not been cutting down old trees and replanting with improved varieties in recent years and this is likely to affect the yield this year as well.
Limited options
Moreover, farmers have limited options of increasing yield as high prices had ensured that they extracted the maximum yield from their trees. Finally, consumers who have stayed away from the market in the past couple of months on account of high prices and low arrivals are likely to re-enter the market and prices could firm up further.
(thehindubusinessline.com)
Tuesday, April 27, 2010
India rubber seen steady on firm overseas cues
India rubber seen steady on firm overseas cues
Posted: 26 Apr 2010 06:33 AM PDT
MUMBAI, April 26 (Reuters) - Indian rubber prices, which hit record highs last week, are likely to remain steady this week as firmness in overseas market is seen offsetting weak spot demand from tyre makers due to higher prices, analysts said.
"Demand is weak compared to last week. Market is expecting improvement in arrivals in next few weeks due to recent rainfall in Kerala," said Shiji Abraham, analyst with JRG Wealth Management.
India's rubber production is likely to rise by 7.5 percent to 893,000 tonnes in 2010/11 helping reduce costlier imports, a senior Rubber Board official said last week.
The benchmark June contract NMRUM0 on the National Multi-Commodity Exchange (NMCE) provisionally closed down 0.3 percent at 17,168 rupees per 100 kg, after hitting a contract high of 17,600 last week.
Spot price of the most traded RSS-4 rubber (ribbed smoked sheet) rose by 100 rupees to 16,850 rupees in Kottayam, Kerala, on Monday, Rubber Board data showed.
The price had hit a record high of 16,950 rupees last week. Firmness in overseas market due to tight supplies will support prices, analysts said.
High demand for rubber means physical supply will remain tight even when tapping gets into full swing in Thailand in May, and Thai RSS3 may stay above $3.50 per kg until June, a senior industry official said on Monday. See [ID:nSGE63P0HA]
Tokyo rubber futures rose on Monday, supported by tight supply, a weaker yen and rising oil prices. See [ID: nTOE63P040]
In India, sales of vehicles -- including cars, utility vehicles, trucks, buses, motorcycles and scooters -- jumped an annual 26.4 percent in 2009/10 to 12.3 million units, data from Society of Indian Automobile Manufacturers (SIAM) showed.
(in.reuters.com)
Rubber prices reach new highs
Posted: 25 Apr 2010 07:04 PM PDT
Rise in global demand, tight supply among factors
PETALING JAYA: Rubber is one of the hottest commodities traded so far this year with price rallies seen in most international rubber exchanges.
Tyre-grade Standard Malaysian Rubber (SMR 20) has also been hitting new highs particularly in the past three months and currently trading above the RM10,600 per tonne level.
According to Association of Natural Rubber Producing Countries (ANRPC) director-general Prof Djoko Said Damardjati, tightness in rubber supply would remain an issue amid an upsurge in demand from China and India for their booming auto and tyre manufacturing industries.
“Severe drought, the current wintering season as well as active replanting activities in most major producing countries could affect rubber output.
“Even the preliminary estimates from members of ANRPC indicate that the global rubber supply is unlikely to rise above 6% this year,” he told StarBiz recently.
ANRPC had earlier estimate that global rubber production could reach 9.5 milllion tonnes this year, up by about 6.3% from last year’s 8.9 million tonnes.
Djoko also expected rubber supply to remain tight until 2011. A large extent of existing yielding trees in major producing countries were planted in 1980s.
“Most of the trees planted have reached declining yield phase, thus the age composition of the existing yielding area is unfavourable for yield improvement,” he added.
Djoko noted that Indonesia and Malaysia had undertaken active replanting activities since 2005.
“I believe rubber prices will remain firm for quite some time until supply recovers, possibly by early 2012.”
Apart from the buoyant demand and drought-ridden supply, he said other factors influencing the rubber market included the weakening US dollar, volatility in yen and the increasing crude oil prices.
Members of the ANRPC countries account for about 94% of the total world natural rubber production.
Interestingly, more than 45% of global consumption of natural rubber is in China, India and Malaysia, which are the major consuming countries in the ANRPC.
ANRPC in its latest report said imports from China during January to February surged 63% for natural rubber and 118% for compound rubber compared with the same period last year.
During the same period, India posted a 17% increase in natural rubber consumption, given the large-scale capacity in its auto tyre manufacturing operation.
Meanwhile, Hwang DBS Vickers Research has also raised its 2010-2012 forecast rubber prices by 39% to 44% as its previous forecasts had not taken into account the price recovery on the back of stronger crude oil prices.
The brokerage said: “We believe strong demand recovery for the automotive sector in China and supply constraint due to ongoing conversions to oil palm and the wintering season between February and April would contribute to the jump in rubber prices.Our assumptions are factoring in 29% lower prices in the second half of 2010 compared with the first half.”
One analyst with a local stockbroking firm said the recent automobile industry statistics unveiled that the pick-up in the auto sector in China and the United States had been strong.
The automobile industry is the single biggest user of latex, easily consuming about 70% of the world latex production.
While some might argue that the price upsurge could be short-term given the traditional low supply wintering season, however, many feel that the current price hike was a reflection of strong demand.
“Even with a possible price reduction down the line, natural rubber prices are unlikely to ease to the low levels of December 2008 and January 2009,” he added.
(biz.thestar.com.my)
More rubber farmers to be encouraged
Posted: 25 Apr 2010 06:59 PM PDT
The Office of the Rubber Replanting Aid Fund (ORRAF) plans to groom 12,000 para rubber xperts over the next four years to support expansion plans and cope with an expected industry boom.
These rubber experts, or mor yang in Thai, will help instruct new planters and train them in how to grow and tap the trees in addition to processing for various rubber products.
Director-general Wit Pratuckchai said the Office planned to launch the second phase of its initiative to expand plantations, with a target of 800,000 rai in new growing areas by 2012.
The first 100,000 rai are planned for this year, 300,000 next year, and 400,000 rai in 2012. About 550,000 rai are in the Northeast region, with the rest spread over the North and central provinces.
As a para rubber tree takes seven years to mature for harvest, he expects thenewfields will increase natural rubber supply by 224,000 tonnes per year from 2017.
The Office has 3.97 billion baht to fund the project, with 2.82 million for saplings, fertiliser and other essentials over the first three years. About 800 million baht will be used for training and 350 million for management.
The second phase has been scaled down from an initial one million rai, following a first-phase planting of one million rai from 2004-06.
The expansion follows the ORRAF's goal to add between 80,000 and 160,000 new rubber planters. The policy targets small planters with 2-15 rai of land, and it is expected to earn each ofthemaminimumof 112,000 baht per year, based on rubber prices of 100 baht per kilogramme.
The Office is confident the industry's bright outlook will attract new growers though many of them have no experience in rubber growing, which is typically more popular in the South.
''We have 120 staffwhowill train the first 1,200 rubber experts starting next month,'' he said.
The trainees from villages and farm co-operatives will undergo a threemonth course on anagement to support the growing industry.
Strong demand from the automobile industry due to the global recovery as well as market peculation have driven rubber prices to record highs. Ribbed smoked rubber sheets (RSS3) for ay delivery reached 128 baht a kilogramme this week, more than double the 57-baht average in the same period of 2009.
Although the industry is booming, Mr Wit cautions planters to carefully manage their supply to minimise risk. Extremely high prices could fluctuate from speculation, leading to default risk on orders by exporters.
Planters will be happy with 80 to 100 baht per kg, considering 50-60 baht for production costs, he said.
(bangkokpost.com)
Posted: 26 Apr 2010 06:33 AM PDT
MUMBAI, April 26 (Reuters) - Indian rubber prices, which hit record highs last week, are likely to remain steady this week as firmness in overseas market is seen offsetting weak spot demand from tyre makers due to higher prices, analysts said.
"Demand is weak compared to last week. Market is expecting improvement in arrivals in next few weeks due to recent rainfall in Kerala," said Shiji Abraham, analyst with JRG Wealth Management.
India's rubber production is likely to rise by 7.5 percent to 893,000 tonnes in 2010/11 helping reduce costlier imports, a senior Rubber Board official said last week.
The benchmark June contract NMRUM0 on the National Multi-Commodity Exchange (NMCE) provisionally closed down 0.3 percent at 17,168 rupees per 100 kg, after hitting a contract high of 17,600 last week.
Spot price of the most traded RSS-4 rubber (ribbed smoked sheet) rose by 100 rupees to 16,850 rupees in Kottayam, Kerala, on Monday, Rubber Board data showed.
The price had hit a record high of 16,950 rupees last week. Firmness in overseas market due to tight supplies will support prices, analysts said.
High demand for rubber means physical supply will remain tight even when tapping gets into full swing in Thailand in May, and Thai RSS3 may stay above $3.50 per kg until June, a senior industry official said on Monday. See [ID:nSGE63P0HA]
Tokyo rubber futures rose on Monday, supported by tight supply, a weaker yen and rising oil prices. See [ID: nTOE63P040]
In India, sales of vehicles -- including cars, utility vehicles, trucks, buses, motorcycles and scooters -- jumped an annual 26.4 percent in 2009/10 to 12.3 million units, data from Society of Indian Automobile Manufacturers (SIAM) showed.
(in.reuters.com)
Rubber prices reach new highs
Posted: 25 Apr 2010 07:04 PM PDT
Rise in global demand, tight supply among factors
PETALING JAYA: Rubber is one of the hottest commodities traded so far this year with price rallies seen in most international rubber exchanges.
Tyre-grade Standard Malaysian Rubber (SMR 20) has also been hitting new highs particularly in the past three months and currently trading above the RM10,600 per tonne level.
According to Association of Natural Rubber Producing Countries (ANRPC) director-general Prof Djoko Said Damardjati, tightness in rubber supply would remain an issue amid an upsurge in demand from China and India for their booming auto and tyre manufacturing industries.
“Severe drought, the current wintering season as well as active replanting activities in most major producing countries could affect rubber output.
“Even the preliminary estimates from members of ANRPC indicate that the global rubber supply is unlikely to rise above 6% this year,” he told StarBiz recently.
ANRPC had earlier estimate that global rubber production could reach 9.5 milllion tonnes this year, up by about 6.3% from last year’s 8.9 million tonnes.
Djoko also expected rubber supply to remain tight until 2011. A large extent of existing yielding trees in major producing countries were planted in 1980s.
“Most of the trees planted have reached declining yield phase, thus the age composition of the existing yielding area is unfavourable for yield improvement,” he added.
Djoko noted that Indonesia and Malaysia had undertaken active replanting activities since 2005.
“I believe rubber prices will remain firm for quite some time until supply recovers, possibly by early 2012.”
Apart from the buoyant demand and drought-ridden supply, he said other factors influencing the rubber market included the weakening US dollar, volatility in yen and the increasing crude oil prices.
Members of the ANRPC countries account for about 94% of the total world natural rubber production.
Interestingly, more than 45% of global consumption of natural rubber is in China, India and Malaysia, which are the major consuming countries in the ANRPC.
ANRPC in its latest report said imports from China during January to February surged 63% for natural rubber and 118% for compound rubber compared with the same period last year.
During the same period, India posted a 17% increase in natural rubber consumption, given the large-scale capacity in its auto tyre manufacturing operation.
Meanwhile, Hwang DBS Vickers Research has also raised its 2010-2012 forecast rubber prices by 39% to 44% as its previous forecasts had not taken into account the price recovery on the back of stronger crude oil prices.
The brokerage said: “We believe strong demand recovery for the automotive sector in China and supply constraint due to ongoing conversions to oil palm and the wintering season between February and April would contribute to the jump in rubber prices.Our assumptions are factoring in 29% lower prices in the second half of 2010 compared with the first half.”
One analyst with a local stockbroking firm said the recent automobile industry statistics unveiled that the pick-up in the auto sector in China and the United States had been strong.
The automobile industry is the single biggest user of latex, easily consuming about 70% of the world latex production.
While some might argue that the price upsurge could be short-term given the traditional low supply wintering season, however, many feel that the current price hike was a reflection of strong demand.
“Even with a possible price reduction down the line, natural rubber prices are unlikely to ease to the low levels of December 2008 and January 2009,” he added.
(biz.thestar.com.my)
More rubber farmers to be encouraged
Posted: 25 Apr 2010 06:59 PM PDT
The Office of the Rubber Replanting Aid Fund (ORRAF) plans to groom 12,000 para rubber xperts over the next four years to support expansion plans and cope with an expected industry boom.
These rubber experts, or mor yang in Thai, will help instruct new planters and train them in how to grow and tap the trees in addition to processing for various rubber products.
Director-general Wit Pratuckchai said the Office planned to launch the second phase of its initiative to expand plantations, with a target of 800,000 rai in new growing areas by 2012.
The first 100,000 rai are planned for this year, 300,000 next year, and 400,000 rai in 2012. About 550,000 rai are in the Northeast region, with the rest spread over the North and central provinces.
As a para rubber tree takes seven years to mature for harvest, he expects thenewfields will increase natural rubber supply by 224,000 tonnes per year from 2017.
The Office has 3.97 billion baht to fund the project, with 2.82 million for saplings, fertiliser and other essentials over the first three years. About 800 million baht will be used for training and 350 million for management.
The second phase has been scaled down from an initial one million rai, following a first-phase planting of one million rai from 2004-06.
The expansion follows the ORRAF's goal to add between 80,000 and 160,000 new rubber planters. The policy targets small planters with 2-15 rai of land, and it is expected to earn each ofthemaminimumof 112,000 baht per year, based on rubber prices of 100 baht per kilogramme.
The Office is confident the industry's bright outlook will attract new growers though many of them have no experience in rubber growing, which is typically more popular in the South.
''We have 120 staffwhowill train the first 1,200 rubber experts starting next month,'' he said.
The trainees from villages and farm co-operatives will undergo a threemonth course on anagement to support the growing industry.
Strong demand from the automobile industry due to the global recovery as well as market peculation have driven rubber prices to record highs. Ribbed smoked rubber sheets (RSS3) for ay delivery reached 128 baht a kilogramme this week, more than double the 57-baht average in the same period of 2009.
Although the industry is booming, Mr Wit cautions planters to carefully manage their supply to minimise risk. Extremely high prices could fluctuate from speculation, leading to default risk on orders by exporters.
Planters will be happy with 80 to 100 baht per kg, considering 50-60 baht for production costs, he said.
(bangkokpost.com)
Monday, April 26, 2010
Bridgestone Says Yuan Policy Won’t Affect China Sales
Bridgestone Says Yuan Policy Won’t Affect China Sales
April 26 (Bloomberg) -- Bridgestone Corp., the world’s largest tiremaker, expects sales volumes in China to increase “aggressively” this year even if the nation allows its currency to appreciate against the dollar.
Sales of tires for trucks and buses in China will probably exceed the 2008 level by more than 10 percent, Director Yujiro Kanahara said in an interview. Car and sports-utility tire sales will also grow, he said. The Tokyo-based company doesn’t disclose specific figures.
China’s car sales jumped 76 percent to 3.52 million units in the first quarter as government stimulus policies helped boost demand in the world’s biggest vehicle market. A yuan revaluation could make tire imports cheaper and lower the cost of raw material purchases, boosting competition among producers. China may allow its currency to appreciate by June 30 to curb inflation, a Bloomberg survey of analysts showed this month.
“We don’t expect China to increase tire imports, even if it allows the yuan’s appreciation, as the government protects the domestic market by tariffs,” Kanahara said in an interview in Tokyo. “A stronger Chinese currency would cut purchasing costs” for rubber from abroad, intensifying price competition among tiremakers, he said.
Bridgestone operates four tire plants in China, selling most of the products made there in the domestic market. The company plans to boost production in the country by 43 percent from last year to 100,000 metric tons this year. It also exports tires to China from Japan, where the company’s output is expected to rise by 16 percent to 510,000 tons this year.
Record Price
Growth in Chinese demand and a seasonal drop in supply from Thailand, the world’s largest exporter, has sent cash rubber prices surging. The free-on-board price, which excludes freight and insurance, of Thai RSS-3 grade rubber for May-delivery rose to a record 128.55 baht ($4.0) per kilogram on April 23, according to the Rubber Institute of Thailand.
“It is an abnormal, unbelievable price,” Kanahara said. The rally may have been caused by “not only fundamentals but speculative moves as well,” Kaoru Tomizawa, Bridgestone’s public relations manager, said in the same interview on April 23.
“We have routes to secure the raw material without making deals in the market,” Tomizawa said. The company uses short- term and longer-term hedging to control the effect of price changes, he said, without elaborating.
Rubber represents about 50 percent of the volume of each tire, Tomizawa said. Half of the rubber used in tires is natural, and the rest is synthetic made from petroleum.
Rubber Substitution
Soaring prices of natural rubber may be spurring tire makers to increase the use of synthetic rubber as an alternative, Tomizawa said. Isoprene rubber can be used, although “there is a limitation on substitution,” he said.
Sales of passenger car tires in China will rise as demand for new models is growing, he said. Volkswagen AG, the biggest foreign carmaker in China, will invest 4.4 billion euros ($5.9 billion) in plants and new models by 2012, while Nissan Motor Co. aims to boost capacity almost 70 percent, the companies said on April 23 at the Beijing Auto Show.
April 26 (Bloomberg) -- Bridgestone Corp., the world’s largest tiremaker, expects sales volumes in China to increase “aggressively” this year even if the nation allows its currency to appreciate against the dollar.
Sales of tires for trucks and buses in China will probably exceed the 2008 level by more than 10 percent, Director Yujiro Kanahara said in an interview. Car and sports-utility tire sales will also grow, he said. The Tokyo-based company doesn’t disclose specific figures.
China’s car sales jumped 76 percent to 3.52 million units in the first quarter as government stimulus policies helped boost demand in the world’s biggest vehicle market. A yuan revaluation could make tire imports cheaper and lower the cost of raw material purchases, boosting competition among producers. China may allow its currency to appreciate by June 30 to curb inflation, a Bloomberg survey of analysts showed this month.
“We don’t expect China to increase tire imports, even if it allows the yuan’s appreciation, as the government protects the domestic market by tariffs,” Kanahara said in an interview in Tokyo. “A stronger Chinese currency would cut purchasing costs” for rubber from abroad, intensifying price competition among tiremakers, he said.
Bridgestone operates four tire plants in China, selling most of the products made there in the domestic market. The company plans to boost production in the country by 43 percent from last year to 100,000 metric tons this year. It also exports tires to China from Japan, where the company’s output is expected to rise by 16 percent to 510,000 tons this year.
Record Price
Growth in Chinese demand and a seasonal drop in supply from Thailand, the world’s largest exporter, has sent cash rubber prices surging. The free-on-board price, which excludes freight and insurance, of Thai RSS-3 grade rubber for May-delivery rose to a record 128.55 baht ($4.0) per kilogram on April 23, according to the Rubber Institute of Thailand.
“It is an abnormal, unbelievable price,” Kanahara said. The rally may have been caused by “not only fundamentals but speculative moves as well,” Kaoru Tomizawa, Bridgestone’s public relations manager, said in the same interview on April 23.
“We have routes to secure the raw material without making deals in the market,” Tomizawa said. The company uses short- term and longer-term hedging to control the effect of price changes, he said, without elaborating.
Rubber represents about 50 percent of the volume of each tire, Tomizawa said. Half of the rubber used in tires is natural, and the rest is synthetic made from petroleum.
Rubber Substitution
Soaring prices of natural rubber may be spurring tire makers to increase the use of synthetic rubber as an alternative, Tomizawa said. Isoprene rubber can be used, although “there is a limitation on substitution,” he said.
Sales of passenger car tires in China will rise as demand for new models is growing, he said. Volkswagen AG, the biggest foreign carmaker in China, will invest 4.4 billion euros ($5.9 billion) in plants and new models by 2012, while Nissan Motor Co. aims to boost capacity almost 70 percent, the companies said on April 23 at the Beijing Auto Show.
Sri Lankan rubber prices hit all time high
Sri Lankan rubber prices hit all time high
Posted: 24 Apr 2010 10:30 PM PDT
Sri Lankan rubber prices gained an all time high at the Colombo auctions on Tuesday with a kilogram of rubber fetching Rs 450, rubber brokers said.
Latex crepe rubber produced at Arapolakande Estate, managed by Kotagala Plantations PLC, Elpitiya estate managed by Elpitiya Plantations PLC and Galutura and Rambukkande estates managed by Balangoda Plantations PLC fetched these high prices.
The RSS1 grade rubber produced at Mahawela, Rambukkande and Paradise estates managed by Balangoda Plantations PLC and Bentota estate managed by Elpitiya Plantations PLC together with Neerawalangala estate managed by a private owner fetched the highest price of Rs. 450 per kilogram at the same auction. M. Dias, Chairman of J.D &Sons (Pvt) Ltd, a rubber broker, told the Business Times that the rubber prices will remain at the Rs. 400 level for some time and the industry will improve further to bring more foreign exchange to the country. Sri Lanka exports only white crepe rubber which has a good demand in the world market, he added.
Meanwhile Malwatte Valley Plantations said it also obtained a record price of Rs 450 for its centrifuged rubber latex manufactured at its Vincent estate in Avissawella. It said the company’s entire production of rubber till the first of the financial year ending June 2010 have been sold at the current, rising prices.
(sundaytimes.lk)
Tokyo market
Tokyo at present is up by 16yen
Posted: 24 Apr 2010 10:30 PM PDT
Sri Lankan rubber prices gained an all time high at the Colombo auctions on Tuesday with a kilogram of rubber fetching Rs 450, rubber brokers said.
Latex crepe rubber produced at Arapolakande Estate, managed by Kotagala Plantations PLC, Elpitiya estate managed by Elpitiya Plantations PLC and Galutura and Rambukkande estates managed by Balangoda Plantations PLC fetched these high prices.
The RSS1 grade rubber produced at Mahawela, Rambukkande and Paradise estates managed by Balangoda Plantations PLC and Bentota estate managed by Elpitiya Plantations PLC together with Neerawalangala estate managed by a private owner fetched the highest price of Rs. 450 per kilogram at the same auction. M. Dias, Chairman of J.D &Sons (Pvt) Ltd, a rubber broker, told the Business Times that the rubber prices will remain at the Rs. 400 level for some time and the industry will improve further to bring more foreign exchange to the country. Sri Lanka exports only white crepe rubber which has a good demand in the world market, he added.
Meanwhile Malwatte Valley Plantations said it also obtained a record price of Rs 450 for its centrifuged rubber latex manufactured at its Vincent estate in Avissawella. It said the company’s entire production of rubber till the first of the financial year ending June 2010 have been sold at the current, rising prices.
(sundaytimes.lk)
Tokyo market
Tokyo at present is up by 16yen
Sunday, April 25, 2010
India's Natural Rubber Production to Rise 8.45%
India's Natural Rubber Production to Rise 8.45%
22 April 2010 – India’s natural rubber (NR) production is likely to rise 8.45% to 901,680 tonnes in the current fiscal year 2010-11 compared with 831,400 tonnes for the fiscal year 2009-10, according to a projection by the Rubber Board of India.
If this projection materialized, this will be the first time that the natural rubber production of the fourth largest producer in the world, after Thailand, Indonesia and Malaysia will cross the 900,000 tonnes mark.
For the fiscal year 2010-11, the additional increase in production will be 70,280 tonnes as compared to a fall of 33,100 tonnes in the fiscal year 2009-10. Total production for the fiscal year 2008-09 was 864,500 tonnes.
In the case of consumption, a lower growth is projected. Total consumption is projected at 986,980 tonnes, an increase of 56,395 tonnes or 6.8% from the fiscal year 2009-10 figure of 930,585 tonnes. Total consumption for the fiscal year 2008-09 was 871,720 tonnes.
Lower domestic supplies due to bad weather and robust demand from tyre makers had forced India to more than double its natural rubber imports the previous year from 78,000 tonnes to more than 170,000 tonnes, which pushed up prices to historic records. Improvement in production this year is likely to bring down imports to pre-2009-10 level.
Higher prices seen for TOCOM rubber contract -traders
Posted: 23 Apr 2010 02:47 PM PDT
* April contract expires at record price for spot contract
* Massive buy-back into expiry triggers CBs, ups volatility
* Spike in spot contract price spreads across contracts
* For a technical view on TOCOM rubber, see [ID:nSGE63M0CY] (Adds technical analysis, background, quotes)
By Chikako Mogi
TOKYO, April 23 (Reuters) - Tokyo rubber futures are expected to continue to gain on tight physical supply, strong demand from China and lower cost compared to spot physical prices, traders said on Friday.
The spot April contract, which expired Friday, rose as high as 472 yen, the highest ever for any spot contract, and which pulled up nearby contracts. [ID:nSGE63M0A5]
The sharp gain led the Tokyo Commodity Exchange to investigate recent price volatility in rubber futures.
"Given the recent sharp moves in rubber prices, we are talking to members of the exchange to find out what has caused the recent volatility and checking open interest," a TOCOM spokesman said. [ID:nTOE63M04O]
On the physical market, Thai RSS3 was offered at a record high of $4.10 per kg earlier this month. TOCOM's May contract rose as far as 409 yen ($4.38) on Friday, but the next nearby contract for June delivery and beyond, hovering around 355 yen ($3.80), still makes Tokyo look cheap for overseas buyers.
Japan's largest commodity exchange, which lists gold, platinum, rubber and other industrial commodity futures, conducts such hearings when price actions appear excessive, though so far it has found no irregularities, the spokesman said.
But bets on prices falling, despite the rise in physical prices which pulled futures higher, were left uncovered until the very last minute and raised concerns about whether some commodity brokerages have failed to properly educate general investors about the practices of delivery, some traders said.
Other traders however pointed to a fundamental reason of tight supply for the spike in prices as weather conditions in top producer Thailand remain unfavourable.
"By mid-week this week, concerns about failed deliveries disappeared. It was fortunate that some hedgers unloaded their long positions so short sellers could buy back and close their positions and bail out of the market, at a huge loss," said a dealer at a Japanese commodity brokerage.
"But there are concerns about next month and beyond, given that prices have risen by more than 100 yen in the past month and supplies remain tight," the dealer said.
Shipments from Thailand to Japan have been delayed, making commodities brokerages reluctant to let go of their rubber holdings in Tokyo, where futures prices are still well below that of physical prices, even with the recent market spike, a dealer at another commodities trading house said.
An internal rule by TOCOM says on the 15th of the month, brokers are advised to remind their customers about delivery on spot contracts, traders said.
"If you were short selling, you should know this and should have closed your positions. Those who held their positions open until the end either took market volatility lightly or were not properly advised by brokerage houses," one dealer said.
Japan's crude rubber inventories totalled 6,477 tonnes as of March 31, down 10.3 percent from 10 days earlier, falling steadily from 8,222 tonnes as of Feb. 28, the highest level since July 20, and approaching a record low of 3,902 tonnes on Nov. 10. [ID:nTOE63E08K]
The drawdown in inventories reflects Japan's exports to China, which imported 28,606 tonnes of synthetic rubber from Japan in March, up 60.84 percent from a year earlier. [ID:nEAP001316]
The outlook for continued tight supply WILL ALSO KEEP INTENSIVE UPWARD PRESSURES ON NEARBY FUTURES CONTRACTS as short sellers will have to buy back the spot contract before its expiry, otherwise they will need to deliver the raw material.
"The fundamental issue here is the tight supply, keeping the negative spread for a while until seasonal factors in producer countries normalise," said Hiroyuki Kikukawa, general manager at Nihon Unicom.
But given that commodities prices generally tend to tread higher into the summer, the resumption in rubber tapping may not have much of a cooling effect on prices, he added. ($1=93.44 Yen)
(in.reuters.com)
Record rubber turnover at NMCE:Crosses Rs.200cr
Posted: 23 Apr 2010 02:43 PM PDT
AHMEDABAD (Commodity Online): India’s leading commodity bourse in rubber futures, National Multi-Commodity Exchange (NMCE) has recorded highest single-day turnover in rubber futures on April 21, 2010, when the rubber turnover on the exchange crossed Rs.200 crore mark for the first time ending the day with a total turnover of Rs.207.77 crore, highest since the launch of the contract.
In a statement issued on Friday, the exchange informed that rubber turnover at NMCE had crossed Rs.200 crores touching Rs.207.77 crores on April 21, 2010, with total traded volume of 12,010 MT with open interest of 8,516 MT. “All stake holders the producers, the cooperative societies, the investors who work on cash & carry, the tyre industry, other consuming industry, have all participated, which is giving very healthy sign. This is a grand achievement, highest ever since the launch of the contract. Earlier the highest turnover was on 26th December 2006 and it was at 189.8 Cr.
Commenting on the development, Anil Mishra, CEO, NMCE informed that the trading volume recorded high despite rubber production undergoing wintering season. A wintering season is the season when rubber trees shed their leaves and as a result tapping of rubber comes down. ““The price of Rubber has been very high due to lower global supply as a result of non conducive weather on the one hand and increased demand on the other. While the demand was burgeoning due to stimulus package and revival of the auto sector, supply was not able to keep pace. Good price is encouraging the farmers to tap as much as possible,” said Mishra adding that the producers now should not hold back their produce and take the advantage of huge price upswing.
Producers have kept their rubber in NMCE warehouses and taken funding from the bank against warehouse receipt. NMCE has presently about 7000 MT of Rubber stock in the warehouses at Aluva, Kozhikode, Ernakulum, Kakkanad, Thrissur, Kakkancherry and Pallakad, the exchange stated.
According to Mishra, it was the low tapping season. “NMCE's increased efforts of sensitization of all the stakeholders are showing good result and now all the stakeholders have understood the need of hedging their price risk in rubber,” Mishra commented.
(commodityonline.com)
22 April 2010 – India’s natural rubber (NR) production is likely to rise 8.45% to 901,680 tonnes in the current fiscal year 2010-11 compared with 831,400 tonnes for the fiscal year 2009-10, according to a projection by the Rubber Board of India.
If this projection materialized, this will be the first time that the natural rubber production of the fourth largest producer in the world, after Thailand, Indonesia and Malaysia will cross the 900,000 tonnes mark.
For the fiscal year 2010-11, the additional increase in production will be 70,280 tonnes as compared to a fall of 33,100 tonnes in the fiscal year 2009-10. Total production for the fiscal year 2008-09 was 864,500 tonnes.
In the case of consumption, a lower growth is projected. Total consumption is projected at 986,980 tonnes, an increase of 56,395 tonnes or 6.8% from the fiscal year 2009-10 figure of 930,585 tonnes. Total consumption for the fiscal year 2008-09 was 871,720 tonnes.
Lower domestic supplies due to bad weather and robust demand from tyre makers had forced India to more than double its natural rubber imports the previous year from 78,000 tonnes to more than 170,000 tonnes, which pushed up prices to historic records. Improvement in production this year is likely to bring down imports to pre-2009-10 level.
Higher prices seen for TOCOM rubber contract -traders
Posted: 23 Apr 2010 02:47 PM PDT
* April contract expires at record price for spot contract
* Massive buy-back into expiry triggers CBs, ups volatility
* Spike in spot contract price spreads across contracts
* For a technical view on TOCOM rubber, see [ID:nSGE63M0CY] (Adds technical analysis, background, quotes)
By Chikako Mogi
TOKYO, April 23 (Reuters) - Tokyo rubber futures are expected to continue to gain on tight physical supply, strong demand from China and lower cost compared to spot physical prices, traders said on Friday.
The spot April contract, which expired Friday, rose as high as 472 yen, the highest ever for any spot contract, and which pulled up nearby contracts. [ID:nSGE63M0A5]
The sharp gain led the Tokyo Commodity Exchange to investigate recent price volatility in rubber futures.
"Given the recent sharp moves in rubber prices, we are talking to members of the exchange to find out what has caused the recent volatility and checking open interest," a TOCOM spokesman said. [ID:nTOE63M04O]
On the physical market, Thai RSS3 was offered at a record high of $4.10 per kg earlier this month. TOCOM's May contract rose as far as 409 yen ($4.38) on Friday, but the next nearby contract for June delivery and beyond, hovering around 355 yen ($3.80), still makes Tokyo look cheap for overseas buyers.
Japan's largest commodity exchange, which lists gold, platinum, rubber and other industrial commodity futures, conducts such hearings when price actions appear excessive, though so far it has found no irregularities, the spokesman said.
But bets on prices falling, despite the rise in physical prices which pulled futures higher, were left uncovered until the very last minute and raised concerns about whether some commodity brokerages have failed to properly educate general investors about the practices of delivery, some traders said.
Other traders however pointed to a fundamental reason of tight supply for the spike in prices as weather conditions in top producer Thailand remain unfavourable.
"By mid-week this week, concerns about failed deliveries disappeared. It was fortunate that some hedgers unloaded their long positions so short sellers could buy back and close their positions and bail out of the market, at a huge loss," said a dealer at a Japanese commodity brokerage.
"But there are concerns about next month and beyond, given that prices have risen by more than 100 yen in the past month and supplies remain tight," the dealer said.
Shipments from Thailand to Japan have been delayed, making commodities brokerages reluctant to let go of their rubber holdings in Tokyo, where futures prices are still well below that of physical prices, even with the recent market spike, a dealer at another commodities trading house said.
An internal rule by TOCOM says on the 15th of the month, brokers are advised to remind their customers about delivery on spot contracts, traders said.
"If you were short selling, you should know this and should have closed your positions. Those who held their positions open until the end either took market volatility lightly or were not properly advised by brokerage houses," one dealer said.
Japan's crude rubber inventories totalled 6,477 tonnes as of March 31, down 10.3 percent from 10 days earlier, falling steadily from 8,222 tonnes as of Feb. 28, the highest level since July 20, and approaching a record low of 3,902 tonnes on Nov. 10. [ID:nTOE63E08K]
The drawdown in inventories reflects Japan's exports to China, which imported 28,606 tonnes of synthetic rubber from Japan in March, up 60.84 percent from a year earlier. [ID:nEAP001316]
The outlook for continued tight supply WILL ALSO KEEP INTENSIVE UPWARD PRESSURES ON NEARBY FUTURES CONTRACTS as short sellers will have to buy back the spot contract before its expiry, otherwise they will need to deliver the raw material.
"The fundamental issue here is the tight supply, keeping the negative spread for a while until seasonal factors in producer countries normalise," said Hiroyuki Kikukawa, general manager at Nihon Unicom.
But given that commodities prices generally tend to tread higher into the summer, the resumption in rubber tapping may not have much of a cooling effect on prices, he added. ($1=93.44 Yen)
(in.reuters.com)
Record rubber turnover at NMCE:Crosses Rs.200cr
Posted: 23 Apr 2010 02:43 PM PDT
AHMEDABAD (Commodity Online): India’s leading commodity bourse in rubber futures, National Multi-Commodity Exchange (NMCE) has recorded highest single-day turnover in rubber futures on April 21, 2010, when the rubber turnover on the exchange crossed Rs.200 crore mark for the first time ending the day with a total turnover of Rs.207.77 crore, highest since the launch of the contract.
In a statement issued on Friday, the exchange informed that rubber turnover at NMCE had crossed Rs.200 crores touching Rs.207.77 crores on April 21, 2010, with total traded volume of 12,010 MT with open interest of 8,516 MT. “All stake holders the producers, the cooperative societies, the investors who work on cash & carry, the tyre industry, other consuming industry, have all participated, which is giving very healthy sign. This is a grand achievement, highest ever since the launch of the contract. Earlier the highest turnover was on 26th December 2006 and it was at 189.8 Cr.
Commenting on the development, Anil Mishra, CEO, NMCE informed that the trading volume recorded high despite rubber production undergoing wintering season. A wintering season is the season when rubber trees shed their leaves and as a result tapping of rubber comes down. ““The price of Rubber has been very high due to lower global supply as a result of non conducive weather on the one hand and increased demand on the other. While the demand was burgeoning due to stimulus package and revival of the auto sector, supply was not able to keep pace. Good price is encouraging the farmers to tap as much as possible,” said Mishra adding that the producers now should not hold back their produce and take the advantage of huge price upswing.
Producers have kept their rubber in NMCE warehouses and taken funding from the bank against warehouse receipt. NMCE has presently about 7000 MT of Rubber stock in the warehouses at Aluva, Kozhikode, Ernakulum, Kakkanad, Thrissur, Kakkancherry and Pallakad, the exchange stated.
According to Mishra, it was the low tapping season. “NMCE's increased efforts of sensitization of all the stakeholders are showing good result and now all the stakeholders have understood the need of hedging their price risk in rubber,” Mishra commented.
(commodityonline.com)
Saturday, April 24, 2010
Spot rubber improves on covering buys
Spot rubber improves on covering buys
Kottayam, April 23
Spot rubber turned better on Friday. Weekend covering purchases kept the market comparatively firm as the domestic futures showed a positive mood on NMCE. Sheet rubber improved to Rs 167.50 from Rs 167 a kg amidst dull volumes. There were no quantity sellers or buyers on any grade and the trend was mixed.
Futures improve
The May futures for RSS 4 improved to Rs 167.55 (165.59), June to Rs 170.20 (168.77), July to Rs 169.60 (167.93) and August to Rs 167 (165.50) a kg on National Multi Commodity Exchange (NMCE). The April futures expired at ¥455.4 (¥450) (Rs 216.50) and May futures improved to ¥405 (¥392) while the June futures slipped to ¥355.3 (¥355.9), July to ¥337.2 (¥337.9), August to ¥323.2 (¥325.7) and September to ¥315.7 (¥318.3) a kg for RSS 3 during the day session on Tokyo Commodity Exchange. RSS 3 closed at Rs 181.25 (181.04) a kg on Singapore Commodity Exchange (SICOM). It firmed up to Rs 177.79 (177.43) a kg at Bangkok.
Spot prices were (Rs/kg): RSS-4: 167.50 (167); RSS-5: 165 (165); ungraded: 164 (163); ISNR 20: 161 (161) and latex 60 per cent: 106 (106).
Kottayam, April 23
Spot rubber turned better on Friday. Weekend covering purchases kept the market comparatively firm as the domestic futures showed a positive mood on NMCE. Sheet rubber improved to Rs 167.50 from Rs 167 a kg amidst dull volumes. There were no quantity sellers or buyers on any grade and the trend was mixed.
Futures improve
The May futures for RSS 4 improved to Rs 167.55 (165.59), June to Rs 170.20 (168.77), July to Rs 169.60 (167.93) and August to Rs 167 (165.50) a kg on National Multi Commodity Exchange (NMCE). The April futures expired at ¥455.4 (¥450) (Rs 216.50) and May futures improved to ¥405 (¥392) while the June futures slipped to ¥355.3 (¥355.9), July to ¥337.2 (¥337.9), August to ¥323.2 (¥325.7) and September to ¥315.7 (¥318.3) a kg for RSS 3 during the day session on Tokyo Commodity Exchange. RSS 3 closed at Rs 181.25 (181.04) a kg on Singapore Commodity Exchange (SICOM). It firmed up to Rs 177.79 (177.43) a kg at Bangkok.
Spot prices were (Rs/kg): RSS-4: 167.50 (167); RSS-5: 165 (165); ungraded: 164 (163); ISNR 20: 161 (161) and latex 60 per cent: 106 (106).
Friday, April 23, 2010
Rubber Drops as Crude Oil Declines; Spot Price Gains to Record
Rubber Drops as Crude Oil Declines; Spot Price Gains to Record
April 23 (Bloomberg) -- Rubber declined for a second day as tight supply in Thailand, the largest exporter, drove the nearby contract on the Tokyo Commodity Exchange to a record high.
September-delivery rubber, the most-active contract, dropped as much as 1 percent to 315.1 yen per kilogram ($3,380 a metric ton). The April-delivery contract, which expires today, jumped as much as 4.9 percent to 472 yen, a record price for a nearby contract, before settling at 455.4 yen.
“A seasonal decrease in supply from Thailand gives support to futures,” Hisaaki Tasaka, an analyst at Tokyo-based commodity broker ACE Koeki Co., said today. “The market may remain buoyant until Thai shipments start picking up as early as June,” he said.
September-delivery rubber tumbled 5.5 percent this week, the biggest decline since the week ended Dec. 11. The contract dropped 0.8 percent to settle at 315.7 yen.
“The price gap between April-delivery futures contract and those of later months was more than 100 yen, reflecting limited supply,” Chaiwat Muenmee, an analyst at DS Futures Co. said by phone from Bangkok.
Speculators with short positions in April futures have to buy back the contract today or the raw material will be delivered.
Crude oil dropped as much as 0.4 percent to $83.37 a barrel before trading at $83.68.
Exchange Probe
The price of the April contract surged 37 percent this month. The Tokyo exchange checked its members’ positions in rubber futures after volatility jumped this week, Kazunari Hayakawa, executive managing officer for the exchange, said in an interview yesterday.
“The investigation created negative sentiment in the market,” DS Futures’ Chaiwat said.
Cash prices in Thailand extended gains because there are limited supplies in the market, the Rubber Institute of Thailand said on its Web site today.
The auctioned price of Thai RSS-3 grade rubber gained 1.1 percent to 119.55 baht ($3.70) a kilogram, after reaching a record of 122.89 baht on April 21. The free-on-board price, which excludes freight and insurance, of Thai RSS-3 grade rubber for May-delivery rose to a record 128.55 baht per kilogram, the institute said.
Thailand is in the wintering season from February to April, when rubber trees shed their leaves and latex output slows, diminishing supplies.
September-delivery rubber on the Shanghai Futures Exchange closed little changed at 24,315 yuan ($3,561) a ton.
April 23 (Bloomberg) -- Rubber declined for a second day as tight supply in Thailand, the largest exporter, drove the nearby contract on the Tokyo Commodity Exchange to a record high.
September-delivery rubber, the most-active contract, dropped as much as 1 percent to 315.1 yen per kilogram ($3,380 a metric ton). The April-delivery contract, which expires today, jumped as much as 4.9 percent to 472 yen, a record price for a nearby contract, before settling at 455.4 yen.
“A seasonal decrease in supply from Thailand gives support to futures,” Hisaaki Tasaka, an analyst at Tokyo-based commodity broker ACE Koeki Co., said today. “The market may remain buoyant until Thai shipments start picking up as early as June,” he said.
September-delivery rubber tumbled 5.5 percent this week, the biggest decline since the week ended Dec. 11. The contract dropped 0.8 percent to settle at 315.7 yen.
“The price gap between April-delivery futures contract and those of later months was more than 100 yen, reflecting limited supply,” Chaiwat Muenmee, an analyst at DS Futures Co. said by phone from Bangkok.
Speculators with short positions in April futures have to buy back the contract today or the raw material will be delivered.
Crude oil dropped as much as 0.4 percent to $83.37 a barrel before trading at $83.68.
Exchange Probe
The price of the April contract surged 37 percent this month. The Tokyo exchange checked its members’ positions in rubber futures after volatility jumped this week, Kazunari Hayakawa, executive managing officer for the exchange, said in an interview yesterday.
“The investigation created negative sentiment in the market,” DS Futures’ Chaiwat said.
Cash prices in Thailand extended gains because there are limited supplies in the market, the Rubber Institute of Thailand said on its Web site today.
The auctioned price of Thai RSS-3 grade rubber gained 1.1 percent to 119.55 baht ($3.70) a kilogram, after reaching a record of 122.89 baht on April 21. The free-on-board price, which excludes freight and insurance, of Thai RSS-3 grade rubber for May-delivery rose to a record 128.55 baht per kilogram, the institute said.
Thailand is in the wintering season from February to April, when rubber trees shed their leaves and latex output slows, diminishing supplies.
September-delivery rubber on the Shanghai Futures Exchange closed little changed at 24,315 yuan ($3,561) a ton.
Rubber Drops to 3-Week Low as Exchange Checks for Manipulation
Rubber Drops to 3-Week Low as Exchange Checks for Manipulation
April 22 (Bloomberg) -- Rubber dropped to a three-week low as the Tokyo Commodity Exchange, which provides the benchmark price for the commodity, checked futures positions held by its members for possible price manipulation.
September-delivery rubber, the most-active contract, fell as much as 4.3 percent to 311.4 yen per kilogram ($3,354 a metric ton), the lowest level since April 1. The price surged by 4 percent in the previous two days and reached a 21-month high of 338.5 yen on April 16. The April-delivery contract gained 0.8 percent to 445 yen, after jumping as much as 2.3 percent to a record 450 yen yesterday.
The exchange is asking commodity brokerage companies how many long positions they hold in contracts for delivery in April, May and June, Kazunari Hayakawa, executive managing officer for the exchange, said today in an interview. “We need to check whether any price manipulation is occurring,” he said by phone. Long positions are bets that prices will rise.
The September-delivery contract, the most active by volume and open interest, lost 2.4 percent to 317.6 yen per kilogram at 1:31 p.m. local time.
The April-delivery contract surged 35 percent this month. Speculators with short positions in April futures must buy back the contract by tomorrow, its expiry date, otherwise the raw material will be delivered. Short positions are bets that prices will decline.
Thai Supply
Supply from Thailand, the world’s largest producer and exporter, decreased seasonally as the nation is in a low- production period from February to April, diminishing supplies and driving cash prices to a record. The nation is in the wintering season, when rubber trees shed their leaves and latex output slows.
The price excluding freight and insurance of May-delivery Thai RSS-3 grade rubber climbed to a record 128.05 baht ($3.98) per kilogram yesterday, according to the Rubber Institute of Thailand.
Prices in Indonesia, the second-largest producer, jumped to the highest since 2008 this year, Rubber Association of Indonesia Chairman Asril Sutan Amir said April 16.
September-delivery rubber on the Shanghai Futures Exchange lost 1.2 percent to 24,300 yuan ($3,560) a ton at the 11:30 a.m. local time break.
Spot rubber prices decline
Kottayam, April 22
Spot rubber declined on Thursday. Selling from certain dealers kept the market under pressure at higher levels, while another sharp fall in domestic futures dampened the sentiments further. Sheet rubber surrendered to Rs 167 from Rs 169 a kg as there were no fresh enquiries from any major consuming industries. “We expect the market to bounce back and break the 170-mark once the correction is over,'' an observer said.
Futures weak
The May futures declined to Rs 165.50 (167.30), June to Rs 168.70 (170.57), July to Rs 168.05 (170.21) and August to Rs 165.50 (166.99) a kg for RSS 4 on National Multi Commodity Exchange. The April futures improved to ¥450 (¥441.5) (Rs 215.72) and May to ¥392 (¥386.8) while the June futures for RSS 3 weakened to ¥355.9 (¥363.5), July to ¥337.9 (¥344.1), August to ¥325.7 (¥332.3) and September to ¥318.3 (¥325.5) a kg during the day session on Tokyo Commodity Exchange. RSS 3 moved down to Rs 181.04 (182.53) a kg on Singapore Commodity Exchange (SICOM). It slipped to Rs 177.43 (177.63) a kg at Bangkok.
Spot prices were (Rs/kg): RSS-4: 167 (169); RSS-5: 165 (167); ungraded: 163 (164); ISNR 20: 161 (162) and latex 60 per cent: 106 (106).
Natural rubber output likely to rise 8.45%
Posted: 21 Apr 2010 08:46 PM PDT
The Rubber Board has projected an increase of 8.45 per cent in the country’s natural rubber (NR) output for the current financial year. According to board’s projection, the total production this year would be 901,680 tonnes compared with 831,400 tonnes last year.
This will be the first time that the natural rubber production will cross the 900,000-tonne mark.
The incremental increase for FY11 will be 70,280 tonnes as against a fall of 33,100 tonnes in 2009-10. The board estimates a marginally lower growth in the case of consumption, as it estimates total consumption of 986,980 tonnes for the current financial year.
The consumption is projected to grow by 56,395 tonnes in the current year. In 2009-10, consumption increased 6.8 per cent at 930,585 tonnes as against 871,720 tonnes in 2008-09.
Meanwhile, Automotive Tyre Manufacturers Association (Atma) has questioned the rationale behind projections.
An analysis of Rubber Board Data shows an average incremental growth in production of only 21,000 tonnes a year over the last 10 years (FY01 to FY10).
A study of the Association of Natural Rubber Producing Countries (ANRPC) put the projected production of NR in India in the year 2010 at 853,000 tonnes, the same as production in the year 2006.
“With new capacities being put up by tyre manufacturers in the country to meet the rising demand from vehicle makers, the NR consumption will grow spirally. The decrease in incremental consumption as estimated by the board is most unfortunate and belie the growing requirements from consuming interests”, said Neeraj Kanwar, chairman, Atma.
India's 2010/11 rubber output seen up 7.5 pct
Posted: 21 Apr 2010 08:40 PM PDT
By Rajendra Jadhav
MUMBAI, April 21 (Reuters) - India's rubber production is likely to rise by 7.5 percent to 893,000 tonnes in 2010/11 helping reduce costlier imports, a senior Rubber Board official said on Wednesday.
"Last year production was down due to bad weather. Now conditions are better. We are estimating higher production," the official, who declined to be named, told Reuters.
The Rubber Board is a statutory body constituted by federal government, under the Rubber Act 1947, for the overall development of the rubber industry in the country.
In 2009/10, the country had produced 831,000 tonnes of rubber, down from 864,500 tonnes a year ago, he said.
But analysts and Kerala-based spot traders were sceptical about the projected jump in production in 2010/11.
"Yes, production will rise this year. But I am not expecting it to rise by 62,000 tonnes. Around 20-25,000 tonnes rise is possible," said Shiji Abraham, analyst with JRG Wealth Management.
Lower domestic supplies and robust demand from tyre makers had forced India to more than double rubber imports last year and pushed up prices to a record.
But improvement in production may cut 2010/11 rubber imports to 70,000 tonnes from 171,000 tonnes a year ago, the board official said.
Market participants said rubber prices, which hit record highs on Wednesday, are unlikely to fall drastically as consumption is also rising in the world's fourth biggest rubber producer.
The consumption for 2010/11 is pegged at 978,000 tonnes, up 5 percent compared to 931,000 tonnes a year ago.
The benchmark June contract NMRUM0 on the National Multi-Commodity Exchange (NMCE) hit a record peak of 17,600 on Wednesday, the highest level for second month contract since futures trade was introduced in 2003.
Spot price of the most traded RSS-4 rubber (ribbed smoked sheet) hit a record high of 16,950 rupees in Kottayam, Kerala, on Wednesday, as per data compiled by the Rubber Board.
In India, sales of vehicles -- including cars, utility vehicles, trucks, buses, motorcycles and scooters -- jumped an annual 26.4 percent in 2009/10 to 12.3 million units, data from Society of Indian Automobile Manufacturers (SIAM) showed.
The South Asian country's rubber exports in the current year are likely to double to 50,000 tonnes, the official said.
April 22 (Bloomberg) -- Rubber dropped to a three-week low as the Tokyo Commodity Exchange, which provides the benchmark price for the commodity, checked futures positions held by its members for possible price manipulation.
September-delivery rubber, the most-active contract, fell as much as 4.3 percent to 311.4 yen per kilogram ($3,354 a metric ton), the lowest level since April 1. The price surged by 4 percent in the previous two days and reached a 21-month high of 338.5 yen on April 16. The April-delivery contract gained 0.8 percent to 445 yen, after jumping as much as 2.3 percent to a record 450 yen yesterday.
The exchange is asking commodity brokerage companies how many long positions they hold in contracts for delivery in April, May and June, Kazunari Hayakawa, executive managing officer for the exchange, said today in an interview. “We need to check whether any price manipulation is occurring,” he said by phone. Long positions are bets that prices will rise.
The September-delivery contract, the most active by volume and open interest, lost 2.4 percent to 317.6 yen per kilogram at 1:31 p.m. local time.
The April-delivery contract surged 35 percent this month. Speculators with short positions in April futures must buy back the contract by tomorrow, its expiry date, otherwise the raw material will be delivered. Short positions are bets that prices will decline.
Thai Supply
Supply from Thailand, the world’s largest producer and exporter, decreased seasonally as the nation is in a low- production period from February to April, diminishing supplies and driving cash prices to a record. The nation is in the wintering season, when rubber trees shed their leaves and latex output slows.
The price excluding freight and insurance of May-delivery Thai RSS-3 grade rubber climbed to a record 128.05 baht ($3.98) per kilogram yesterday, according to the Rubber Institute of Thailand.
Prices in Indonesia, the second-largest producer, jumped to the highest since 2008 this year, Rubber Association of Indonesia Chairman Asril Sutan Amir said April 16.
September-delivery rubber on the Shanghai Futures Exchange lost 1.2 percent to 24,300 yuan ($3,560) a ton at the 11:30 a.m. local time break.
Spot rubber prices decline
Kottayam, April 22
Spot rubber declined on Thursday. Selling from certain dealers kept the market under pressure at higher levels, while another sharp fall in domestic futures dampened the sentiments further. Sheet rubber surrendered to Rs 167 from Rs 169 a kg as there were no fresh enquiries from any major consuming industries. “We expect the market to bounce back and break the 170-mark once the correction is over,'' an observer said.
Futures weak
The May futures declined to Rs 165.50 (167.30), June to Rs 168.70 (170.57), July to Rs 168.05 (170.21) and August to Rs 165.50 (166.99) a kg for RSS 4 on National Multi Commodity Exchange. The April futures improved to ¥450 (¥441.5) (Rs 215.72) and May to ¥392 (¥386.8) while the June futures for RSS 3 weakened to ¥355.9 (¥363.5), July to ¥337.9 (¥344.1), August to ¥325.7 (¥332.3) and September to ¥318.3 (¥325.5) a kg during the day session on Tokyo Commodity Exchange. RSS 3 moved down to Rs 181.04 (182.53) a kg on Singapore Commodity Exchange (SICOM). It slipped to Rs 177.43 (177.63) a kg at Bangkok.
Spot prices were (Rs/kg): RSS-4: 167 (169); RSS-5: 165 (167); ungraded: 163 (164); ISNR 20: 161 (162) and latex 60 per cent: 106 (106).
Natural rubber output likely to rise 8.45%
Posted: 21 Apr 2010 08:46 PM PDT
The Rubber Board has projected an increase of 8.45 per cent in the country’s natural rubber (NR) output for the current financial year. According to board’s projection, the total production this year would be 901,680 tonnes compared with 831,400 tonnes last year.
This will be the first time that the natural rubber production will cross the 900,000-tonne mark.
The incremental increase for FY11 will be 70,280 tonnes as against a fall of 33,100 tonnes in 2009-10. The board estimates a marginally lower growth in the case of consumption, as it estimates total consumption of 986,980 tonnes for the current financial year.
The consumption is projected to grow by 56,395 tonnes in the current year. In 2009-10, consumption increased 6.8 per cent at 930,585 tonnes as against 871,720 tonnes in 2008-09.
Meanwhile, Automotive Tyre Manufacturers Association (Atma) has questioned the rationale behind projections.
An analysis of Rubber Board Data shows an average incremental growth in production of only 21,000 tonnes a year over the last 10 years (FY01 to FY10).
A study of the Association of Natural Rubber Producing Countries (ANRPC) put the projected production of NR in India in the year 2010 at 853,000 tonnes, the same as production in the year 2006.
“With new capacities being put up by tyre manufacturers in the country to meet the rising demand from vehicle makers, the NR consumption will grow spirally. The decrease in incremental consumption as estimated by the board is most unfortunate and belie the growing requirements from consuming interests”, said Neeraj Kanwar, chairman, Atma.
India's 2010/11 rubber output seen up 7.5 pct
Posted: 21 Apr 2010 08:40 PM PDT
By Rajendra Jadhav
MUMBAI, April 21 (Reuters) - India's rubber production is likely to rise by 7.5 percent to 893,000 tonnes in 2010/11 helping reduce costlier imports, a senior Rubber Board official said on Wednesday.
"Last year production was down due to bad weather. Now conditions are better. We are estimating higher production," the official, who declined to be named, told Reuters.
The Rubber Board is a statutory body constituted by federal government, under the Rubber Act 1947, for the overall development of the rubber industry in the country.
In 2009/10, the country had produced 831,000 tonnes of rubber, down from 864,500 tonnes a year ago, he said.
But analysts and Kerala-based spot traders were sceptical about the projected jump in production in 2010/11.
"Yes, production will rise this year. But I am not expecting it to rise by 62,000 tonnes. Around 20-25,000 tonnes rise is possible," said Shiji Abraham, analyst with JRG Wealth Management.
Lower domestic supplies and robust demand from tyre makers had forced India to more than double rubber imports last year and pushed up prices to a record.
But improvement in production may cut 2010/11 rubber imports to 70,000 tonnes from 171,000 tonnes a year ago, the board official said.
Market participants said rubber prices, which hit record highs on Wednesday, are unlikely to fall drastically as consumption is also rising in the world's fourth biggest rubber producer.
The consumption for 2010/11 is pegged at 978,000 tonnes, up 5 percent compared to 931,000 tonnes a year ago.
The benchmark June contract NMRUM0 on the National Multi-Commodity Exchange (NMCE) hit a record peak of 17,600 on Wednesday, the highest level for second month contract since futures trade was introduced in 2003.
Spot price of the most traded RSS-4 rubber (ribbed smoked sheet) hit a record high of 16,950 rupees in Kottayam, Kerala, on Wednesday, as per data compiled by the Rubber Board.
In India, sales of vehicles -- including cars, utility vehicles, trucks, buses, motorcycles and scooters -- jumped an annual 26.4 percent in 2009/10 to 12.3 million units, data from Society of Indian Automobile Manufacturers (SIAM) showed.
The South Asian country's rubber exports in the current year are likely to double to 50,000 tonnes, the official said.
Thursday, April 22, 2010
Rubber Positions in Tokyo Checked for Manipulation
Rubber Positions in Tokyo Checked for Manipulation
April 22 (Bloomberg) -- The Tokyo Commodity Exchange, which provides the benchmark price for natural rubber, is checking futures positions held by its members after the volatility of prices jumped.
“We have checked with every commodity brokerage company about how many long positions they hold in contracts for delivery in April, May and June,” Kazunari Hayakawa, executive managing officer for the exchange, said today by phone. “We need to check whether any price manipulation is occurring.”
September-delivery rubber, the most-active futures contract in the exchange, fell as much as 4.3 percent today after surging by 4 percent in the previous two days.
The April-delivery rubber jumped by as much as 2.3 percent yesterday to 450 yen per kilogram ($4,851 a metric ton), the highest-ever price for a nearby contract. The contract hadn’t traded by 11:28 a.m. Tokyo time and will expire tomorrow.
The contract surged 35 percent this month as supply from Thailand, the world’s largest producer and exporter, decreased seasonally as the nation is in a low-production period from February to April.
Speculators with short, or sell, positions in April- delivery rubber must buy back the contract by April 23 otherwise the raw material will be delivered.
Mixed trend in rubber
Kottayam, April 21
Spot rubber prices witnessed a mixed trend on Wednesday. The market opened better with sheet rubber quoting up to Rs 170 a kg but surrendered the gains partially on late trades following the declines in its futures on National Multi Commodity Exchange. The grade concluded the session at Rs 169 (168.50) a kg, recording marginal gains though there was no fresh buying from major consuming industries.
Futures slip
The May futures slipped to Rs 167.05 (170.57), June to Rs 170.41 (173.80), July to Rs 170.10 (173.54) and August to Rs 166.75 (170.34) a kg for RSS 4 on National Multi Commodity Exchange. The April futures for RSS 3 improved to ¥441.5 (¥440) (Rs 211.40), May to ¥386.8 (¥375.6), June to ¥363.5 (¥357.3), July to ¥344.1 (¥341.4), August to ¥332.3 (¥329.3) a kg during the day session on Tokyo Commodity Exchange. RSS 3 flared up sharply to Rs 177.63 (171.84) a kg at Bangkok. The grade improved to Rs 182.53 (181.14) a kg on Singapore Commodity Exchange (SICOM).
Spot prices were (Rs/kg): RSS-4: 169 (168.50); RSS-5: 167 (166); ungraded: 164 (164); ISNR 20: 162 (161.50) and latex 60 per cent: 106 (106).
Rubber turns out to be a better investment than gold, silver
Prices to stay firm on tight demand-supply gap.
Ahmedabad, April 18
Very few investors would have ever imagined that an agricultural crop like rubber could give them better returns than gold, silver, Nifty or Sensex. But this has actually happened over the last one year.
The trend, according to an official of National Multi-CommodityExchange (NMCE) here, shows that rubber has emerged as the best bet for the investors for getting the highest returns on their investments when compared to major asset classes.
As on March 31, 2010, if gold and silver gave return of 7.19 per cent and 22.6 per cent on investment respectively, rubber produced an unprecedented return of 86.74 per cent.
Even Sensex and Nifty gave returns of 77.01 per cent and 71.54 per cent respectively.
In fact, over a first three-month period, gold and Sensex gave negative returns of 1.91 per cent and 0.18 per cent respectively.
Tightly balanced market
Currently the rubber market is very tightly balanced globally as well as in India. And when there is a tightly balanced demand and supply situation, even a small change in either demand or supply will have a disproportionately large impact on prices. That is exactly what is happening now.
Positive signals
Global growth signals are very positive in the largest consuming country like China, where the auto sector sales are booming.
India also is having huge upsurge in rubber demand, thanks to earlier import inventories.
Otherwise, the situation would have been more alarming, the official said.
While there is a huge, increasing demand for rubber, the supply has not kept pace with it. Also, the imports are very expensive due to high international rubber prices and 20 per cent import duty on rubber.Therefore, the rubber prices will remain firm for some time.
Wednesday, April 21, 2010
Rubber seen easing on global cues, weak demand
Rubber seen easing on global cues, weak demand
Posted: 19 Apr 2010 03:49 PM PDT
MUMBAI: Indian rubber prices, which hit record highs last week, are likely to correct this week tracking weakness in global markets and as reluctant buyers wait for a sharp fall before purchasing, analysts said.
"Buyers are postponing purchase. Prices in international market are falling and tyre-makers are waiting for a fall in domestic prices," said Shiji Abraham, analyst with JRG Wealth Management.
Tokyo rubber futures tumbled to a near-three-week low on Monday, falling sharply from last week's 21-month high as the Goldman Sachs fraud probe unnerved financial markets and lower oil prices added to the pressure on rubber, dealers said.
The benchmark May contract on the National Multi-Commodity Exchange(NMCE) provisionally closed 1.4 per cent down at Rs 16,629 per 100 kg, after hitting a record high of Rs 17,189 last week.
Spot price of the most traded RSS-4 rubber (ribbed smoked sheet) fell by Rs 250 to Rs 16,700 in Kottayam, Kerala, on Monday, Rubber Board data showed.
The price had hit a record high of Rs 16,950 on Saturday.
Production worries in key producing countries like Thailand and Malaysia will limit the fall in prices, Shiji said.
In India, sales of vehicles -- including cars, utility vehicles, trucks, buses, motorcycles and scooters -- jumped an annual 26.4 per cent in 2009/10 to 12.3 million units, data from Society of Indian Automobile Manufacturers (SIAM) showed.
India's natural rubber production dropped 3.8 per cent in 2009/10 due to adverse climatic conditions, but a rise in consumption during the period lifted the country's imports, the Rubber Board said.
(economictimes.indiatimes.com)
Rubber Board output estimate dubbed ‘over-optimistic'
Posted: 19 Apr 2010 03:47 PM PDT
Kochi, April 19
Projections made by the Rubber Board on the country's rubber production for the year 2010-11 are grossly over-estimated, the Indian tyre industry has said.
The Automotive Tyre Manufacturers Association (ATMA) has termed the Rubber Board's projection of 70,280 tonnes of additional production this year over-optimistic. This is far in excess of the average annual increase of 21,000 tonnes recorded by Indian rubber producers over the last 10 years, ATMA pointed out.
“We see no basis for the over-optimistic growth projections made by the Rubber Board. The over-estimated projection will only send a wrong signal to the Government about natural rubber availability while the gulf between production and consumption of rubber is widening in India and production has not been able to keep pace with rising consumption.
The production deficit of rubber in India increased to 99,165 tonnes in 2010-11 as against 7,220 tonnes in 2008-09. To meet the deficit, the rubber industry had to import 1,70,000 tonnes of rubber in 2009-10 as against 81,500 tonnes in 2008-09,” Mr Neeraj Kanwar, Chairman of ATMA, said.
Rubber board's view
ATMA also pointed out that an earlier study conducted by the Association of Natural Rubber Producing Countries had projected production of rubber in India in 2010 at 8,53,000 tonnes, the same production as in 2006.
However the Rubber Board has defended its projections stating that it is just three per cent more than the production of 2008-09. It pointed out that last year was an exceptional year of low global production and growth projections should not be based on such exceptional years.
Its projections were based on the fact that more than 6,000 hectares of additional area would come under tapping as young trees planted seven years ago mature and become ready for tapping. The prognosis were also based on the fact that new and high yielding planting materials were used in the new plantations as also the surmise that the high prices would induce the farmer to intensify his tapping operations.
Consumption issue
ATMA has also expressed its surprise on the growth in consumption as projected by the Rubber Board. The Board has lowered the incremental growth in natural rubber consumption to 56,395 tonnes as against a growth of 59,280 tonnes in 2009-10.
In order to meet the rising demand from vehicle makers in the country, new capacities being put up tyre manufacturers and rubber consumption is poised to grow spirally. The decrease in incremental consumption as estimated by the Rubber Board is most unfortunate and belie the growing requirements from consuming interests, Mr Kanwar added.
In a recent communication to the Prime Minister, Mr Kanwar has asked for permission for duty-free import of at least 2,00,000 tonnes of natural rubber as rubber availability has become a matter of serious concern even when the prices have touched a historic high.
Currently rubber prices are ruling at Rs 172 a kg, almost 80 per cent more than the average price of Rs 95 per kg in 2009. Tyre companies are not in a position to import rubber since they have to pay a 20 per cent customs duty on such imports.
(thehindubusinessline.com)
Posted: 19 Apr 2010 03:49 PM PDT
MUMBAI: Indian rubber prices, which hit record highs last week, are likely to correct this week tracking weakness in global markets and as reluctant buyers wait for a sharp fall before purchasing, analysts said.
"Buyers are postponing purchase. Prices in international market are falling and tyre-makers are waiting for a fall in domestic prices," said Shiji Abraham, analyst with JRG Wealth Management.
Tokyo rubber futures tumbled to a near-three-week low on Monday, falling sharply from last week's 21-month high as the Goldman Sachs fraud probe unnerved financial markets and lower oil prices added to the pressure on rubber, dealers said.
The benchmark May contract on the National Multi-Commodity Exchange(NMCE) provisionally closed 1.4 per cent down at Rs 16,629 per 100 kg, after hitting a record high of Rs 17,189 last week.
Spot price of the most traded RSS-4 rubber (ribbed smoked sheet) fell by Rs 250 to Rs 16,700 in Kottayam, Kerala, on Monday, Rubber Board data showed.
The price had hit a record high of Rs 16,950 on Saturday.
Production worries in key producing countries like Thailand and Malaysia will limit the fall in prices, Shiji said.
In India, sales of vehicles -- including cars, utility vehicles, trucks, buses, motorcycles and scooters -- jumped an annual 26.4 per cent in 2009/10 to 12.3 million units, data from Society of Indian Automobile Manufacturers (SIAM) showed.
India's natural rubber production dropped 3.8 per cent in 2009/10 due to adverse climatic conditions, but a rise in consumption during the period lifted the country's imports, the Rubber Board said.
(economictimes.indiatimes.com)
Rubber Board output estimate dubbed ‘over-optimistic'
Posted: 19 Apr 2010 03:47 PM PDT
Kochi, April 19
Projections made by the Rubber Board on the country's rubber production for the year 2010-11 are grossly over-estimated, the Indian tyre industry has said.
The Automotive Tyre Manufacturers Association (ATMA) has termed the Rubber Board's projection of 70,280 tonnes of additional production this year over-optimistic. This is far in excess of the average annual increase of 21,000 tonnes recorded by Indian rubber producers over the last 10 years, ATMA pointed out.
“We see no basis for the over-optimistic growth projections made by the Rubber Board. The over-estimated projection will only send a wrong signal to the Government about natural rubber availability while the gulf between production and consumption of rubber is widening in India and production has not been able to keep pace with rising consumption.
The production deficit of rubber in India increased to 99,165 tonnes in 2010-11 as against 7,220 tonnes in 2008-09. To meet the deficit, the rubber industry had to import 1,70,000 tonnes of rubber in 2009-10 as against 81,500 tonnes in 2008-09,” Mr Neeraj Kanwar, Chairman of ATMA, said.
Rubber board's view
ATMA also pointed out that an earlier study conducted by the Association of Natural Rubber Producing Countries had projected production of rubber in India in 2010 at 8,53,000 tonnes, the same production as in 2006.
However the Rubber Board has defended its projections stating that it is just three per cent more than the production of 2008-09. It pointed out that last year was an exceptional year of low global production and growth projections should not be based on such exceptional years.
Its projections were based on the fact that more than 6,000 hectares of additional area would come under tapping as young trees planted seven years ago mature and become ready for tapping. The prognosis were also based on the fact that new and high yielding planting materials were used in the new plantations as also the surmise that the high prices would induce the farmer to intensify his tapping operations.
Consumption issue
ATMA has also expressed its surprise on the growth in consumption as projected by the Rubber Board. The Board has lowered the incremental growth in natural rubber consumption to 56,395 tonnes as against a growth of 59,280 tonnes in 2009-10.
In order to meet the rising demand from vehicle makers in the country, new capacities being put up tyre manufacturers and rubber consumption is poised to grow spirally. The decrease in incremental consumption as estimated by the Rubber Board is most unfortunate and belie the growing requirements from consuming interests, Mr Kanwar added.
In a recent communication to the Prime Minister, Mr Kanwar has asked for permission for duty-free import of at least 2,00,000 tonnes of natural rubber as rubber availability has become a matter of serious concern even when the prices have touched a historic high.
Currently rubber prices are ruling at Rs 172 a kg, almost 80 per cent more than the average price of Rs 95 per kg in 2009. Tyre companies are not in a position to import rubber since they have to pay a 20 per cent customs duty on such imports.
(thehindubusinessline.com)
Apollo, India Tiremakers Seek Rubber Tax Cuts on 18% Price Jump
Apollo, India Tiremakers Seek Rubber Tax Cuts on 18% Price Jump
April 21 (Bloomberg) -- Apollo Tyres Ltd., India’s biggest tiremaker by market value, and other local tiremakers are seeking a reduction in rubber import taxes because of an 18 percent jump in prices for the raw material this year.
“The government has to intervene because this commodity is going through the roof,” said Neeraj Kanwar, Apollo’s managing director, said in an interview yesterday. “There is no way I can absorb such huge jumps.”
Apollo plans to raise prices about 7 percent as early as next month to help offset the rising cost of rubber, which has been caused by surging demand in China and reduced production in Thailand. Tiremakers have also asked the government to double the import duty on tires to 20 percent, according to a letter sent to Prime Minister Manmohan Singh by an industry group.
“Margins of tiremakers should be impacted for the next two quarters even if they increase prices” because of the higher rubber prices, said Surjit Singh Arora, an analyst at Prabhudas Lilladher Ltd. in Mumbai.
The Automotive Tyre Manufacturers’ Association last month asked the government to cut the import tax on rubber to 7.5 percent from 20 percent and to allow duty-free imports of at least 200,000 metric tons, said Kanwar, 38, who is the group’s chairman. It also asked for a ban on futures trading in rubber till “volatility” in prices falls and the abolition of a special tax on rubber.
Government Meeting
The association, which represents nine tiremakers, has met Commerce Minister Anand Sharma and is waiting for a meeting with the prime minister, Kanwar said yesterday in an interview in Gurgaon, where Apollo is based. Ashok K. Mangotra, additional secretary in the ministry of commerce and industry, was not immediately available for comment.
Raw materials account for 70 percent of the production cost of tires, according to the tiremakers association. Rubber accounts for 42 percent of the total raw material cost.
Rubber futures may rise to as much as 200 rupees a kilogram, while the price would need to drop to 120 rupees a kilogram, “for me to get a respite,” Kanwar said. April-delivery rubber futures on the National Commodity & Derivatives Exchange Ltd. in Mumbai gained 0.6 percent to 169.22 rupees a kilogram yesterday.
Rubber prices have jumped about 18 percent since the start of 2010, based on the benchmark futures contract on the Tokyo Commodity Exchange.
Price Rises
The tiremaker gained 2.4 percent to 76.35 rupees at 11:51 a.m. in Mumbai. It earlier rose as much as 5 percent, the most in two weeks.
To boost profits, Apollo plans to sell more higher margin radial tires for passenger cars, trucks and SUVs, Kanwar said. A new factory near India’s southern city of Chennai has started operations and will reach capacity of 500 tons a day, or 6,000 radial tires for trucks and 16,000 for passenger cars, in the quarter ending March 31, 2011, Kanwar said. It will reach half that capacity by September, he said.
Apollo, set up in 1975, gets about 85 percent of sales from customers replacing their old tires, and the remainder from selling directly to vehicle makers, the company said in a presentation to investors in March. Tires for trucks account for 56 percent of sales, car tires makes up 32 percent and tractors and other vehicles account for the remainder, it said.
April 21 (Bloomberg) -- Apollo Tyres Ltd., India’s biggest tiremaker by market value, and other local tiremakers are seeking a reduction in rubber import taxes because of an 18 percent jump in prices for the raw material this year.
“The government has to intervene because this commodity is going through the roof,” said Neeraj Kanwar, Apollo’s managing director, said in an interview yesterday. “There is no way I can absorb such huge jumps.”
Apollo plans to raise prices about 7 percent as early as next month to help offset the rising cost of rubber, which has been caused by surging demand in China and reduced production in Thailand. Tiremakers have also asked the government to double the import duty on tires to 20 percent, according to a letter sent to Prime Minister Manmohan Singh by an industry group.
“Margins of tiremakers should be impacted for the next two quarters even if they increase prices” because of the higher rubber prices, said Surjit Singh Arora, an analyst at Prabhudas Lilladher Ltd. in Mumbai.
The Automotive Tyre Manufacturers’ Association last month asked the government to cut the import tax on rubber to 7.5 percent from 20 percent and to allow duty-free imports of at least 200,000 metric tons, said Kanwar, 38, who is the group’s chairman. It also asked for a ban on futures trading in rubber till “volatility” in prices falls and the abolition of a special tax on rubber.
Government Meeting
The association, which represents nine tiremakers, has met Commerce Minister Anand Sharma and is waiting for a meeting with the prime minister, Kanwar said yesterday in an interview in Gurgaon, where Apollo is based. Ashok K. Mangotra, additional secretary in the ministry of commerce and industry, was not immediately available for comment.
Raw materials account for 70 percent of the production cost of tires, according to the tiremakers association. Rubber accounts for 42 percent of the total raw material cost.
Rubber futures may rise to as much as 200 rupees a kilogram, while the price would need to drop to 120 rupees a kilogram, “for me to get a respite,” Kanwar said. April-delivery rubber futures on the National Commodity & Derivatives Exchange Ltd. in Mumbai gained 0.6 percent to 169.22 rupees a kilogram yesterday.
Rubber prices have jumped about 18 percent since the start of 2010, based on the benchmark futures contract on the Tokyo Commodity Exchange.
Price Rises
The tiremaker gained 2.4 percent to 76.35 rupees at 11:51 a.m. in Mumbai. It earlier rose as much as 5 percent, the most in two weeks.
To boost profits, Apollo plans to sell more higher margin radial tires for passenger cars, trucks and SUVs, Kanwar said. A new factory near India’s southern city of Chennai has started operations and will reach capacity of 500 tons a day, or 6,000 radial tires for trucks and 16,000 for passenger cars, in the quarter ending March 31, 2011, Kanwar said. It will reach half that capacity by September, he said.
Apollo, set up in 1975, gets about 85 percent of sales from customers replacing their old tires, and the remainder from selling directly to vehicle makers, the company said in a presentation to investors in March. Tires for trucks account for 56 percent of sales, car tires makes up 32 percent and tractors and other vehicles account for the remainder, it said.
Tuesday, April 20, 2010
Rubber May Drop 22% as Rally ‘Too Far, Too Fast,’ Marubeni Says
Rubber May Drop 22% as Rally ‘Too Far, Too Fast,’ Marubeni Says
April 20 (Bloomberg) -- Rubber may drop by as much as 22 percent from a record by the end of this year as the recent rally was too steep for tire makers, said Marubeni Corp., the largest Japanese trader of the commodity.
The cash price for ribbed smoked sheet rubber may trade from $3 to $3.70 a kilogram in the second half of this year, Kazutaka Sonomoto, manager at Marubeni’s rubber section, said in an interview yesterday. Futures are traded on the Tokyo Commodity Exchange.
Rubber staged a record rally this month as Thailand, the world’s largest producer and exporter, entered a low-production period, reducing supplies amid a jump in Chinese tire demand. The most-active contract on Tocom climbed to a 21-month high on April 16, while the immediate-delivery contract surged to a record today.
“The latest rally was too far, too fast,” Sonomoto said yesterday in Tokyo. “Tire makers with technological know-how will probably shift to synthetic rubber” or other cheaper alternatives, he said.
Rising prices have slowed rubber purchases by China, the world’s largest consumer, said Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo. Buyers are “not in a rush to purchase as they have enough stockpiles,” Shigemoto said by phone.
“Tire makers cannot increase the prices of their products as rapidly as the rally in the rubber market,” Sonomoto said, because the gap between rubber prices and affordable levels for end-users is widening, he said. The share price of Bridgestone Corp., the world’s largest tire maker, has lost 8 percent to 1,509 yen in Tokyo this year.
Synthetic Rubber
The price of synthetic rubber, which typically moves in line with crude oil, is about $2,500 a ton, Sonomoto said. That compares with the last traded price of $3,442 a ton for the most-active natural rubber contract in Tokyo.
Global tire production is expected to grow by 3 percent to 5 percent a year, led by rising car sales in China, the world’s largest vehicle market, Sonomoto said.
“Chinese rubber demand will keep expanding as per-capita car ownership in the country may increase to the level of Japan,” he said.
China’s consumption of natural rubber is forecast to grow 10 percent from last year to 3.35 million metric tons, according to a report issued last month by the Association of Natural Rubber Producing Countries.
The country’s National Development and Reform Commission sold the entire 30,000 tons on offer from state stockpiles at this year’s first auction on April 14 for as much as 26,000 yuan ($3,809) a ton, compared with the 22,200 yuan base price. It plans to auction another 30,000 metric tons of rubber on April 23, the commission said on its Web site April 16.
Price Pressure
The free-on-board price, or price excluding freight and insurance, of Thai RSS-3 grade rubber for May delivery rose to a record 124.30 baht ($3.85) per kilogram yesterday, according to the Rubber Institute of Thailand. SIR-20 grade rubber from Indonesia, the second-largest producer, has jumped to $3.35 a kilogram this year, a level not seen since 2008, Rubber Association of Indonesia Chairman Asril Sutan Amir said April 16.
Still, rubber prices in China may come under pressure if the world’s fastest-growing major economy allows the yuan to appreciate against the dollar, Sonomoto said.
Futures price movements in Shanghai, the world’s most- active rubber market in terms of trading volume, are becoming increasingly influential on other markets, including Tocom, he said.
Yuan Appreciation
“If China revalues the yuan, the action will likely put a drag on Shanghai futures, leading to sales of rubber in Tokyo and other markets,” he said. Tocom provides the global benchmark for rubber prices as the market, unlike Shanghai, is open to hedgers and speculators from any country.
China may allow the yuan to appreciate by June 30 to curb inflation while avoiding a one-time jump in value that might endanger export jobs, a survey showed this month.
Twelve of 19 respondents surveyed by Bloomberg said the central bank will allow the currency to float more freely this quarter, five expect it to happen by Sept. 30, and the rest see the move by year-end.
Rubber for September delivery on Tocom gained 1.8 percent to 318.6 yen a kilogram ($3,442 a ton) at 11:11 a.m. local time. The price has slumped 5 percent since reaching a 21-month high of 338.5 yen on April 16. April-delivery rubber on Tocom gained 4.5 percent to a record 418 yen per kilogram.
September-delivery rubber on the Shanghai Futures Exchange dropped for a second day, tumbling 4 percent to 24,325 yuan a ton.
April 20 (Bloomberg) -- Rubber may drop by as much as 22 percent from a record by the end of this year as the recent rally was too steep for tire makers, said Marubeni Corp., the largest Japanese trader of the commodity.
The cash price for ribbed smoked sheet rubber may trade from $3 to $3.70 a kilogram in the second half of this year, Kazutaka Sonomoto, manager at Marubeni’s rubber section, said in an interview yesterday. Futures are traded on the Tokyo Commodity Exchange.
Rubber staged a record rally this month as Thailand, the world’s largest producer and exporter, entered a low-production period, reducing supplies amid a jump in Chinese tire demand. The most-active contract on Tocom climbed to a 21-month high on April 16, while the immediate-delivery contract surged to a record today.
“The latest rally was too far, too fast,” Sonomoto said yesterday in Tokyo. “Tire makers with technological know-how will probably shift to synthetic rubber” or other cheaper alternatives, he said.
Rising prices have slowed rubber purchases by China, the world’s largest consumer, said Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo. Buyers are “not in a rush to purchase as they have enough stockpiles,” Shigemoto said by phone.
“Tire makers cannot increase the prices of their products as rapidly as the rally in the rubber market,” Sonomoto said, because the gap between rubber prices and affordable levels for end-users is widening, he said. The share price of Bridgestone Corp., the world’s largest tire maker, has lost 8 percent to 1,509 yen in Tokyo this year.
Synthetic Rubber
The price of synthetic rubber, which typically moves in line with crude oil, is about $2,500 a ton, Sonomoto said. That compares with the last traded price of $3,442 a ton for the most-active natural rubber contract in Tokyo.
Global tire production is expected to grow by 3 percent to 5 percent a year, led by rising car sales in China, the world’s largest vehicle market, Sonomoto said.
“Chinese rubber demand will keep expanding as per-capita car ownership in the country may increase to the level of Japan,” he said.
China’s consumption of natural rubber is forecast to grow 10 percent from last year to 3.35 million metric tons, according to a report issued last month by the Association of Natural Rubber Producing Countries.
The country’s National Development and Reform Commission sold the entire 30,000 tons on offer from state stockpiles at this year’s first auction on April 14 for as much as 26,000 yuan ($3,809) a ton, compared with the 22,200 yuan base price. It plans to auction another 30,000 metric tons of rubber on April 23, the commission said on its Web site April 16.
Price Pressure
The free-on-board price, or price excluding freight and insurance, of Thai RSS-3 grade rubber for May delivery rose to a record 124.30 baht ($3.85) per kilogram yesterday, according to the Rubber Institute of Thailand. SIR-20 grade rubber from Indonesia, the second-largest producer, has jumped to $3.35 a kilogram this year, a level not seen since 2008, Rubber Association of Indonesia Chairman Asril Sutan Amir said April 16.
Still, rubber prices in China may come under pressure if the world’s fastest-growing major economy allows the yuan to appreciate against the dollar, Sonomoto said.
Futures price movements in Shanghai, the world’s most- active rubber market in terms of trading volume, are becoming increasingly influential on other markets, including Tocom, he said.
Yuan Appreciation
“If China revalues the yuan, the action will likely put a drag on Shanghai futures, leading to sales of rubber in Tokyo and other markets,” he said. Tocom provides the global benchmark for rubber prices as the market, unlike Shanghai, is open to hedgers and speculators from any country.
China may allow the yuan to appreciate by June 30 to curb inflation while avoiding a one-time jump in value that might endanger export jobs, a survey showed this month.
Twelve of 19 respondents surveyed by Bloomberg said the central bank will allow the currency to float more freely this quarter, five expect it to happen by Sept. 30, and the rest see the move by year-end.
Rubber for September delivery on Tocom gained 1.8 percent to 318.6 yen a kilogram ($3,442 a ton) at 11:11 a.m. local time. The price has slumped 5 percent since reaching a 21-month high of 338.5 yen on April 16. April-delivery rubber on Tocom gained 4.5 percent to a record 418 yen per kilogram.
September-delivery rubber on the Shanghai Futures Exchange dropped for a second day, tumbling 4 percent to 24,325 yuan a ton.
Monday, April 19, 2010
Rubber Drops Most in Two Months as Commodities Slump on Goldman
Rubber Drops Most in Two Months as Commodities Slump on Goldman
April 19 (Bloomberg) -- Rubber slumped by the most in more than two months after U.S. securities regulators accused Goldman Sachs Group Inc. of fraud, sapping investor demand for assets ranging from stocks to metals.
Futures in Tokyo fell as much as 3.9 percent, the biggest loss since Feb. 5. The price declined from a 21-month high of 338.5 yen per kilogram ($3,673 a metric ton), which was reached on April 16, to the lowest level since April 9.
Gold and other commodities including oil tumbled after the regulators filed the suit against Goldman Sachs, one of Wall Street’s biggest traders and brokers of raw materials. The Japanese currency rose to the highest level since March against the dollar, cutting the appeal of yen-denominated contracts.
“Rubber tracked losses in other commodities as the news about Goldman caused risk-aversion,” said Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo.
Rubber for September delivery lost 3.7 percent to 322 yen per kilogram on the Tokyo Commodity Exchange at 10:48 a.m. local time. The price decreased for a second day.
The Securities and Exchange Commission alleged that Goldman created and sold securities linked to subprime mortgage-backed securities. The firm failed to disclose to investors that hedge fund Paulson & Co. was betting against the instruments and influenced the selections in the portfolio, the SEC said. Paulson wasn’t accused of wrongdoing.
Largest Brokerage
As of Feb. 28, Goldman was the largest commodity brokerage by adjusted net capital, the minimum needed to meet the requirements set by the Commodity Futures Trading Commission, according to data from the agency.
“The Goldman shock is discouraging investors from taking on risk in stocks, currencies and commodities,” said Tomochika Kitaoka, a senior strategist at Mizuho Securities Co.
Rubber futures have gained 17 percent this year as China led a recovery in global economies from the worst postwar recession, boosting sales of cars and tires.
China’s gross domestic product expanded 11.9 percent in the first quarter from a year earlier, the statistics bureau said on April 15. That was the fastest pace in almost three years. The nation is the largest consumer of natural rubber.
A seasonal decline in rubber output in Thailand, the largest producer, also helped increase rubber prices by 4.5 percent so far this month, Shigemoto at JSC said.
Thailand is in a low-production period from February to April, known as wintering, when rubber trees shed their leaves and latex output slows. Shipments from the country will remain slow until early June, he said.
Expanding demand and declining supply drove China’s rubber stockpiles to the lowest level since July 2009 last week, Shigemoto said. Natural rubber inventories monitored by the Shanghai Futures Exchange plunged 9,802 tons to 48,979 tons, the bourse said on April 16, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin.
September-delivery rubber on the Shanghai Futures Exchange lost 2.5 percent to 24,710 yuan ($3,620) a ton at 9:35 a.m. local time.
April 19 (Bloomberg) -- Rubber slumped by the most in more than two months after U.S. securities regulators accused Goldman Sachs Group Inc. of fraud, sapping investor demand for assets ranging from stocks to metals.
Futures in Tokyo fell as much as 3.9 percent, the biggest loss since Feb. 5. The price declined from a 21-month high of 338.5 yen per kilogram ($3,673 a metric ton), which was reached on April 16, to the lowest level since April 9.
Gold and other commodities including oil tumbled after the regulators filed the suit against Goldman Sachs, one of Wall Street’s biggest traders and brokers of raw materials. The Japanese currency rose to the highest level since March against the dollar, cutting the appeal of yen-denominated contracts.
“Rubber tracked losses in other commodities as the news about Goldman caused risk-aversion,” said Takaki Shigemoto, an analyst at research and investment company JSC Corp. in Tokyo.
Rubber for September delivery lost 3.7 percent to 322 yen per kilogram on the Tokyo Commodity Exchange at 10:48 a.m. local time. The price decreased for a second day.
The Securities and Exchange Commission alleged that Goldman created and sold securities linked to subprime mortgage-backed securities. The firm failed to disclose to investors that hedge fund Paulson & Co. was betting against the instruments and influenced the selections in the portfolio, the SEC said. Paulson wasn’t accused of wrongdoing.
Largest Brokerage
As of Feb. 28, Goldman was the largest commodity brokerage by adjusted net capital, the minimum needed to meet the requirements set by the Commodity Futures Trading Commission, according to data from the agency.
“The Goldman shock is discouraging investors from taking on risk in stocks, currencies and commodities,” said Tomochika Kitaoka, a senior strategist at Mizuho Securities Co.
Rubber futures have gained 17 percent this year as China led a recovery in global economies from the worst postwar recession, boosting sales of cars and tires.
China’s gross domestic product expanded 11.9 percent in the first quarter from a year earlier, the statistics bureau said on April 15. That was the fastest pace in almost three years. The nation is the largest consumer of natural rubber.
A seasonal decline in rubber output in Thailand, the largest producer, also helped increase rubber prices by 4.5 percent so far this month, Shigemoto at JSC said.
Thailand is in a low-production period from February to April, known as wintering, when rubber trees shed their leaves and latex output slows. Shipments from the country will remain slow until early June, he said.
Expanding demand and declining supply drove China’s rubber stockpiles to the lowest level since July 2009 last week, Shigemoto said. Natural rubber inventories monitored by the Shanghai Futures Exchange plunged 9,802 tons to 48,979 tons, the bourse said on April 16, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin.
September-delivery rubber on the Shanghai Futures Exchange lost 2.5 percent to 24,710 yuan ($3,620) a ton at 9:35 a.m. local time.
Saturday, April 17, 2010
Sheet rubber surges on speculative buying
Sheet rubber surges on speculative buying
Kottayam, April 16
Spot rubber made excellent gains on Friday. The gap between the domestic and international rates widened, while the physical market remained closed on Thursday owing to Vishu and it surged ahead during the session mainly on speculative buying and short covering. Sheet rubber improved to Rs 170 from Rs 164.50 a kg though there have been no enquiries from the tyre sector. The undercurrent was extremely bullish.
Futures firm
The May futures for RSS 4 closed at Rs 170.40 (170.37), June at Rs 173.61 (173.71), July at Rs 174.29 (173.69) and August at Rs 172 a kg on National Multi Commodity Exchange. RSS 3 increased sharply at its April futures to ¥411.9 (¥382.2) (Rs 197.04), May to ¥383 (¥369.3), June to ¥367.4 (¥361.4), July to ¥354.9 (¥354.3), August to ¥343 (¥343.8) and September to ¥334.2 (334.9) a kg during the day session on Tokyo Commodity Exchange. RSS 3 improved to Rs 181.61 (177.25) a kg on Singapore Commodity .
Spot prices were (Rs/kg): RSS-4: 170 (164.50); RSS-5: 168 (162.50); ungraded: 165 (161); ISNR 20: 162 (161) and latex 60 per cent: 105 (104).
SINGAPORE, April 14 (Reuters) - Some shipments of Thai RSS3 may be delayed because of increasingly tight supplies, traders said on Wednesday, while consumers in China are buying the same grade at much lower prices from domestic warehouses. Cash rubber prices are at their highest ever in Thailand, Indonesia and Malaysia due to difficulties in getting raw material during the dry wintering season, which curbs the flow of latex. Rallies in
RSS3 was sold to tyre makers at $3.81 to $3.90 a kg for nearby shipments late on Tuesday and offers have already reached $4.
"Thai dealers have definitely asked for delays in shipments but we don't know yet about the quantity," said a dealer in
Rubber Futures Reaches Record on Tight Supply, Thai Conflicts
Post under News
April 16 (Bloomberg) -- Rubber futures for delivery this month climbed to an all-time high as cash prices in Thailand reached a record amid concerns that political turmoil in the largest exporting country may disrupt supplies.
Futures for April delivery in Tokyo gained as much as 7.8 percent to 412.10 yen per kilogram ($4,451 a metric ton) before settling at 411.90 yen. Rubber for September delivery, the most- active contract, rose as much as 1.1 percent to 338.5 yen, the highest level since July 15, 2008. Cash prices in Thailand, the largest exporter, have been rising to records since the start of April as supplies drop during low-production period.
“Thailand’s political crisis has aggravated concerns that supplies will be tighter amid strong demand from China and a recovery in cars in major economies,” said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co.
Weekend clashes between Thai security forces and anti- government protesters were the deadliest in 18 years, killing 23 people and injuring more than 800. The demonstrators remain camped in the capital’s business district demanding the government dissolve the parliament.
April-delivery contract advanced as much as 29.90 yen to 412.10 yen per kilogram, the highest level since the futures began trading in December 1952, Tokyo Commodity Exchange said in a statement today. The previous record was 386.80 yen on Feb. 13, 1980, the exchange said.
The most-active contract has climbed 21 percent this year as global economies recovered from recession, stoking sales of cars and tires. The contract dropped 0.2 percent to settle at 334.2 yen per kilogram, set for the fourth weekly gain.
The free-on-board price of Thai RSS-3 grade rubber for May- delivery climbed to a record 123.30 baht ($3.82) a kilogram on April 12, according to the Rubber Institute of Thailand. The market has been closed since Tuesday for New Year holidays.
Wintering
A rally in local prices has been helped by the low-output period in Thailand, the institute said on April 12. Rubber trees shed their leaves and producers reduce tapping during the season known as wintering.
Rising prices “reflect tightness of the RSS-3 supply from Thailand,” said Felix Yeo, a trading manager at the Singapore unit of Marubeni Corp.
Robust economic growth in China, the biggest consumer of natural rubber, also drives the prices higher as it enhances optimism that demand for the commodity will increase, Yeo said.
China, the largest natural rubber consumer, plans to sell 30,000 tons on April 23, the National Development and Reform Commission said on its Web site today. The sale on April 14 fetched an average 25,020 yuan per ton, the commission said.
“The report dragged the Shanghai prices lower,” Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co., said by phone from Bangkok.
September-delivery rubber on the Shanghai Futures Exchange fell 1.6 percent to settle at 25,350 yuan ($3,714) a ton.
Friday, April 16, 2010
Rubber Futures Reaches Record on Tight Supply, Thai Conflicts
Rubber Futures Reaches Record on Tight Supply, Thai Conflicts
April 16 (Bloomberg) -- Rubber futures for delivery this month climbed to an all-time high as cash prices in Thailand reached a record amid concerns that political turmoil in the largest exporting country may disrupt supplies.
Futures for April delivery in Tokyo gained as much as 7.8 percent to 412.10 yen per kilogram ($4,451 a metric ton) before settling at 411.90 yen. Rubber for September delivery, the most- active contract, rose as much as 1.1 percent to 338.5 yen, the highest level since July 15, 2008. Cash prices in Thailand, the largest exporter, have been rising to records since the start of April as supplies drop during low-production period.
“Thailand’s political crisis has aggravated concerns that supplies will be tighter amid strong demand from China and a recovery in cars in major economies,” said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co.
Weekend clashes between Thai security forces and anti- government protesters were the deadliest in 18 years, killing 23 people and injuring more than 800. The demonstrators remain camped in the capital’s business district demanding the government dissolve the parliament.
April-delivery contract advanced as much as 29.90 yen to 412.10 yen per kilogram, the highest level since the futures began trading in December 1952, Tokyo Commodity Exchange said in a statement today. The previous record was 386.80 yen on Feb. 13, 1980, the exchange said.
The most-active contract has climbed 21 percent this year as global economies recovered from recession, stoking sales of cars and tires. The contract dropped 0.2 percent to settle at 334.2 yen per kilogram, set for the fourth weekly gain.
The free-on-board price of Thai RSS-3 grade rubber for May- delivery climbed to a record 123.30 baht ($3.82) a kilogram on April 12, according to the Rubber Institute of Thailand. The market has been closed since Tuesday for New Year holidays.
Wintering
A rally in local prices has been helped by the low-output period in Thailand, the institute said on April 12. Rubber trees shed their leaves and producers reduce tapping during the season known as wintering.
Rising prices “reflect tightness of the RSS-3 supply from Thailand,” said Felix Yeo, a trading manager at the Singapore unit of Marubeni Corp.
Robust economic growth in China, the biggest consumer of natural rubber, also drives the prices higher as it enhances optimism that demand for the commodity will increase, Yeo said.
China’s gross domestic product grew 11.9 percent in the first quarter from a year earlier, the most since the second quarter of 2007, the statistics bureau said at a briefing in Beijing yesterday. That was more than the median 11.7 percent estimate in a Bloomberg News survey of 24 economists.
China, the largest natural rubber consumer, plans to sell 30,000 tons on April 23, the National Development and Reform Commission said on its Web site today. The sale on April 14 fetched an average 25,020 yuan per ton, the commission said.
“The report dragged the Shanghai prices lower,” Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co., said by phone from Bangkok.
September-delivery rubber on the Shanghai Futures Exchange fell 1.6 percent to settle at 25,350 yuan ($3,714) a ton.
Indonesia Rubber Surges to Two-Year High on ‘Huge’ Demand Gain
April 16 (Bloomberg) -- Rubber prices in Indonesia, the world’s second-largest producer, gained to the highest level in at least two years as rains disrupted tapping amid a “huge” surge in demand, a trade group said.
The free-on-board price, or price without freight and insurance, for SIR-20 grade rubber has jumped around 20 percent to $3.35 a kilogram this year, a level not seen since 2008, according to Asril Sutan Amir, chairman of the Rubber Association of Indonesia.
“Two factors that supported the price are low supplies of raw materials from plantations due to rains that cut tapping and also a huge increase in demand, especially from China and India,” Amir said in a telephone interview from Jakarta today. “China is no doubt the shining star for the rubber market, with its economic growth and high vehicles and tires production.”
Indonesian prices have tracked gains in benchmark rubber futures in Tokyo, which have increased more than 21 percent this year on concern that supplies from Thailand and Indonesia won’t keep pace with rising Chinese demand.
Natural rubber exports from Indonesia to China accounted for about 25 percent of the 2 million metric tons the country shipped last year, more than doubling from 12 percent in 2007, Amir said.
“The sentiment from Thailand’s low production and political tension may continue to add support to prices,” Suryadi Mulya, director of CV Dramaga, a Bogor, West Java-based rubber exporter, said by phone.
Thai Records
Futures for April delivery in Tokyo surged as much as 7.6 percent to a record 411.3 yen per kilogram ($4,441 a metric ton) before trading at 397.60 yen at 12:07 p.m. Jakarta time. Rubber for September delivery, the most-active contract, rose as much as 1.1 percent to 338.5 yen, the highest level since July 15, 2008, before trading 0.2 percent lower at 334.2 yen.
Cash prices in Thailand have been rising to records since the start of April as supplies drop during the low-production period known as wintering, when rubber trees shed leaves and latex output drops.
The free-on-board price of Thai RSS-3 grade rubber for May- delivery climbed to a record 123.30 baht ($3.82) a kilogram on April 12, according to the Rubber Institute of Thailand. The market has been closed since April 13 for the country’s New Year holidays.
China Plans to Sell 30,000 Tons of Natural Rubber, NDRC Says
April 16 (Bloomberg) -- China plans to sell 30,000 tons of natural rubber on April 23, the National Development and Reform Commission said on its Web site today.
The nation sold natural rubber at an average price of 25,020 yuan per ton on April 14, according to the statement.
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