Spot rubber ends flat in dull trade

Spot rubber ends flat in dull trade


Kottayam, June 9

Physical rubber prices finished unchanged for the fifth consecutive day on Wednesday. The market activities were dull as there were no trendsetting factors to trigger a definite direction.

Sheet rubber finished steady at Rs 168.00 a kg amidst extremely dull volumes.

FUTURES SLIP

The June futures slipped to Rs167.05 (167.83); July to Rs 163.47 (164.25); August to Rs 157.50 (158.48); and September to Rs 153.95 (154.77) per kg for RSS 4 on the National Multi-Commodity Exchange.

RSS 3 June futures declined to ¥ 349.2 / Rs179.51 (¥ 351.0); July to ¥ 329.0 (¥ 343.6); August to ¥ 311.0 (¥ 316.8); September to ¥ 286.4 (¥ 289.0); October to ¥ 265.6 (¥ 267.1); and November to ¥ 260.2 (262.1) per kg during the day session on the Tokyo Commodity Exchange (TOCOM). The June futures moved down further to ¥ 343.6 (Rs 176.55); July to ¥ 325.9; August to ¥ 309.0; September to ¥ 286.0; October to ¥ 265.1; and November to ¥ 259.4 per kg during the night session.

RSS 3 (spot) fell sharply to Rs 165.97 (169.14) a kg at Bangkok.

Spot rates (Rs/kg) were: RSS-4: 168 (168); RSS-5: 165 (165); ungraded: 163 (163); ISNR 20: 150 (150); and Latex 60%: 110.50 (110.50)





Rubber Falls to Three-Week Low on Debt Crisis Fear, Thai Supply
Posted: 09 Jun 2010 06:20 AM PDT


June 9 (Bloomberg) -- Rubber declined to a three-week low on concern that demand may weaken if Europe’s debt crisis worsens and as supplies from Thailand increased.

Futures in Tokyo decreased as much as 3.2 percent to the lowest level since May 18. The price declined for the second time in three days and is headed for a second weekly decline.

Asian stocks fell on concern that the sovereign-debt crisis will spread as Fitch Ratings called the U.K.’s fiscal challenge “formidable.” Global investors have little confidence in Europe’s efforts to contain the turmoil, with 73 percent calling a default by Greece likely, a Bloomberg survey showed.

“Europe’s debt crisis is the largest drag on the price,” Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co., said today by phone. “Rubber is also losing support from fundamentals as supply from Thailand is growing seasonally.”

Rubber for November delivery lost as much as 8.5 yen to 253.6 yen per kilogram ($2,772 a metric ton) before closing at 260.2 yen. The commodity has dropped 5.7 percent this year.

The MSCI Asia Pacific Index fell 0.6 percent to 109.67 at 5:01 p.m. in Tokyo.

A quarterly poll of investors and analysts who subscribe to Bloomberg showed only 23 percent expect Europe’s almost $1 trillion rescue package to both keep the European monetary union together and prevent a debt default by a government. More than 40 percent say Greece is likely to abandon the euro.

“There is clearly a risk of a breakup of the euro,” said Geoff Marson, managing director at a unit of London-based Odey Asset Management, which oversees about $6 billion.

In Thailand, the world’s largest exporter, prices extended a decline for the sixth day as Chinese buyers continue delaying purchases, the Rubber Institute of Thailand said on its website today.

The free-on-board price of RSS-3 grade rubber for July delivery fell 1.3 percent to 115.1 baht a kilogram today.

“Thai supplies have increased and that puts pressure on the market,” Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co., said by phone from Bangkok.

September-delivery rubber on the Shanghai Futures Exchange gained 1.3 percent to settle at 20,980 yuan ($3,072) a ton.

(bloomberg.com)





Hike in rubber exports levy on cards in Thailand
Posted: 09 Jun 2010 06:17 AM PDT
MUMBAI (Commodity Online): A levy on natural-rubber exports from Thailand, the world's largest exporter, may be increased to promote processing and stabilize local prices, in line with an international agreement, according to a deputy minister.

The revised levy may range from 0.9 baht ($0.03) to 5 baht ($0.17) a kilogram based on a sliding scale of free-onboard prices. The existing levy ranges from 0.9 baht ($0.03) a kilo to 1.4 baht ($0.047). Should the cabinet approve the revised rates they will start on Oct. 1st.

Association, cash prices of natural rubber in Thailand, the world’s largest exporter of the commodity, may decline as production increases this month. Output may exceed 200,000 tons a month in June and July, up as much as 30 percent from a low-production period in April and May. Output this year may be 3.2 million tons, matching that of 2009.

U.S. auto sales in May rose for the seventh consecutive month as most car makers recorded robust gains on the back of rising consumer confidence. In China, however, auto sales slowed down last month as falling stock prices and rising consumer prices eroded wealth in the world’s largest automobile market. China auto sales for May rose 25% to 885,800 units for cars, sport-utility vehicles and multipurpose vehicles, compared with 34% in April

According to the state-run Rubber Board, natural rubber imports by India, the fourth-biggest producer, fell 42 percent last month after early summer rain and record prices lifted production. Overseas purchases dropped to 11,487 metric tonnes in May from 19,828 tons a year earlier. Imports in April-to- May dropped 26 percent to 22,363 tons. According to the Thai Rubber

Natural rubber production in India increased by 2 per cent to 54,600 tonnes in May, compared to 53,550 tonnes in the same month last year, the Rubber Board said yesterday (June 3). The rise in natural rubber (RSS-4 variety) production was attributed to increased tapping.

(commodityonline.com)





Tyre makers raise prices for third time this year
Posted: 09 Jun 2010 06:15 AM PDT
Leading tyre companies have increased prices in the beginning of the month — a part of the third round of price increase that was earlier decided by these companies.

Prices have been raised by three-four per cent across the board, putting pressure on vehicle owners and transporting companies. Tyre prices were increased four-seven per cent in January and three-four per cent in May.

According to the top managements of major tyre companies, the price increase was inevitable because of the sharp rise in prices of raw materials, especially natural rubber (NR). NR prices have gone up by 25-30 per cent in the first five months of the current year. This could be compensated only by raising prices, they said.
“We are not happy to raise prices for the third time in a row, but there is no other way out,” they said.

Apollo Tyres has increased prices by 3.5 per cent across the board. Sathish Sharma, chief, manufacturing and marketing, said only a 20 per cent price hike could have fully compensated the company for the rise in costs, but that could not be done at one go.

So far, this year, our prices had risen by 10 per cent, he said. He added the raw material price index of tyre manufactruers had risen 15 per cent in the current quarter as against a 13 per cent increase in January-March.

The increase has seriously affected the companies as 65 per cent of the raw material used to make tyres is rubber. Raw material prices account for 70 per cent of the production cost.

A S Mehta, director, marketing, JK Tyres, said the company had raised prices by 11 per cent in the current year, the latest 3.5 per cent increase being from this June. But, he added, the increase in the price of natural rubber had not been fully absorbed yet.

The current price was arrived at when the rubber price was Rs 140 a kg. But NR is now around Rs 170 a kg.

Prices should be increased by 11-12 per cent for full absorption of the raw material price increase, said industry players.

Along with NR, prices of carbon black and caprolactum are rising, leading to lower profits for tyre companies. Profits of all leading tyre companies dipped in the last quarter of 2009-10. Mehta said 50 per cent rubber was being consumed by the non-tyre sector and a large number of rubber-based small and medium enterprises were facing a serious crisis.

In spite of repeated appeals by rubber-based industries, the government is not intervening due to the political might of rubber growers.

The industries should be ensured adequate supply of NR, but in the domestic market, the supply-demand gap is widening. So, duty-free import of 200,000 tonnes rubber was urgently required, said company sources.

The hike in the price of caprolactum due to the increase in the price of crude oil has led to a sharp rise in the cost of production of nylon tyre cord. Mehta said tyre companies were facing strong resistance from end users, especially from transporting companies.

So, a full absorption of the additional cost of production is yet to happen. So, more price escalation could not be ruled out unless there was a paradigm shift in the government policy on rubber imports, said industry players.

(business-standard.com)