Spot rubber prices rule firm

Spot rubber prices rule firm

Kottayam, June 7

Physical rubber prices finished unchanged on Monday. Sharp declines in the leading international indices failed to make any impact there as there were no quantity sellers on any grade fearing short supplies.

Sheet rubber closed steady at Rs 168 a kg as in the previous session. The volumes were dull. The June futures for RSS 4 improved to Rs 168.49 (167.83), July to Rs 164.90 (162.99), August to Rs 158.97 (157.15) and September to Rs 154.99 (153.75) a kg on the National Multi Commodity Exchange.

RSS 3 declined at its June futures to ¥345.0 / Rs176.66 (¥ 357.9), July to ¥340.7 (¥353.2), August to ¥312.0 (¥326.7), September to ¥284.0 (¥ 299.6), October to ¥ 262.4 (¥ 277.6) and November to ¥ 257.3 (273.9) a kg during the day session on the Tokyo Commodity Exchange.

The June futures recovered partially to ¥ 350.0 (Rs179.22), July to ¥ 341.5, August to ¥ 313.3 September to ¥ 285.4, October to ¥263.7 and November to ¥258.7 a kg on late trades. RSS 3 (spot) weakened to Rs 168.05 (171.24) a kg at Bangkok.

Spot rates (Rs/kg) were: RSS-4: 168 (168); RSS-5:165 (165); ungraded:163 (163); ISNR 20:151.50 (151.50) and Latex 60 per cent :110.50 (110.50)



Rubber Tumbles to Two-Week Low on Europe Debt Crisis, Oil Dip
Posted: 06 Jun 2010 10:30 PM PDT

By Supunnabul Suwannakij

June 7 (Bloomberg) -- Rubber tumbled to the lowest level in two weeks on concern the European debt crisis may slow the global economic recovery, weakening demand for the commodity used to make tires.

Futures in Tokyo plunged as much as 6.5 percent to 256 yen a kilogram ($2,809 a metric ton), the lowest level since May 21. The price fell 3.8 percent last week, the biggest drop since the week ended May 7, on increased output from Thailand and concern that Chinese demand may decline.

Crude oil dropped for a second day amid investor’s fear Europe’s debt crisis will widen and after the U.S. added fewer jobs than forecast last month, suggesting energy demand may be slow to recover. The euro fell to its weakest level since November 2001 versus the yen.

“The main factor for the sharp fall today is because of stronger yen, triggered by the euro collapse,” said Kazunori Kokubo, general manager for International Business Department of commodity broker Yutaka Shoji Ltd. “Other commodities, especially oil, also came down so sharply. That reflects concerns over impact of the Europe’s debt problems.”

Rubber for November delivery, the most-active contract, declined 16 yen, or 5.8 percent, to 257.9 yen per kilogram on the Tokyo Commodity Exchange as of 11:36 a.m. in Tokyo.

September-delivery rubber on the Shanghai Futures Exchange declined the 5 percent daily limit to 20,560 yuan ($3,011) a ton, the lowest level since Nov. 13, 2009.

China’s sales of cars, sport-utility vehicles and multipurpose vehicles rose 25 percent in May from a year earlier, compared with growth of 34 percent in April, the China Automotive Technology & Research Center said June 1.

Thai Supplies

“Oil’s decline spilled over to the rubber market,” Chaiwat Muenmee, an analyst at broker DS Futures Co., said by phone from Bangkok. Rubber often tracks oil prices as the rival synthetic product is made from petroleum.

Crude oil for July delivery lost 2.4 percent to $69.83 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 4.2 percent on June 4 after the Labor Department said that payrolls rose by 431,000 in May. Economists projected a 536,000 gain, according to the median forecast in a Bloomberg News survey.

Cash prices of natural rubber in Thailand, the top exporter, may decline as production increases this month, the Thai Rubber Association said last week.

Production may exceed 200,000 tons a month in June and July, as much as 30 percent more than the low-output period in April and May, the group’s President Luckchai Kittipol said June 2. Output this year may be 3.2 million tons, matching 2009, he said.

The free-on-board price of Thai RSS-3 grade rubber for July delivery, which excludes freight and insurance, dropped 1.6 percent June 4 to 119.65 baht ($3.66) a kilogram, the Rubber Institute of Thailand said on its website. The prices will be updated at about noon local time.

(bloomberg.com)





U.S. Auto Sales Up but China Slowed Down
Posted: 06 Jun 2010 10:27 PM PDT
7 June 2010 - 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.

Growing purchases by business owners, renewed popularity for some large trucks and sport utility vehicles, recent decline in the price of gasoline and higher purchases by rental car companies contributed to the strength of the U.S. auto sales in May.

General Motors Co. reported a 17% year-over-year rise in monthly sales to 223,410 cars and light trucks. Ford Motor Co. posted a 22% rise to 162,813, whilst Chrysler Group LLC a 33% rise to 104,819.

For the makers of Japanese cars in the U.S, Toyota Motor Corp. reported a 6.7% rise for May to 162,813 vehicles. Honda Motor Co. posted May sales of 105,407, an increase of 18.6% from May 2009 while Nissan Motor Corp. said its sales in May increased by 24% to 83,764 units.

Korea’s Hyundai Motor Co. matched Chrysler’s growth rate, as its sales also increased 33% to 49,045 vehicles.

Despite the gains recorded during the last seven months, vehicle makers were cautious about its sustainability citing recent declines in the stock market and the Euro-zone debt crisis as potential threats.

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.

(Irco.biz)





Strong commodity prices dampened by European debt crisis
Posted: 06 Jun 2010 07:42 PM PDT
On the global front, cocoa prices on both London and New York markets are experiencing new rallies due to shrinking stockpiles and tight supplies for chocolate ingredients despite higher demand.

Cocoa stockpiles in the warehouses monitored by US ICE Futures are at the lowest since March 24.

Last Friday, cocoa on ICE Futures for July delivery touched a high of US$3,065 per tonne – the highest recorded since May 11 – before closing at US$3,048 per tonne.

Similarly, the commodity advanced to £2,567 a tonne on the Liffe exchange in London, the highest price since at least 21 years ago.

CPO


After touching a high of RM2,700 per tonne in May, CPO has gradually come down to trade below RM2,500 per tonne currently.

CPO, which takes its cue from the lower crude oil and soybean prices, also had to succumb to higher stock build-up and lower offtake from major overseas buyers.

In the coming months, market players feared that local palm oil stocks would increase further, particularly in September and October, being seasonally high production periods for the year.

Malaysian Estate Owners Association president Boon Weng Siew said CPO was not likely to touch RM3,000 per tonne this year, on expectation of further increase in palm oil stocks for the rest of 2010.

“Should crude oil prices fall below US$70 per barrel, CPO prices are expected to come down further,” he added. Palm oil biodiesel is a substitute for fossil fuel.

To ensure stability in CPO prices, Boon said that Malaysia needed to speed up the implementation of its mandatory biodiesel programme. “We must quickly take some of the high palm oil stocks for biodiesel production,” he said.

Tin

Tin prices on the Kuala Lumpur Tin Market so far this year have fared better than in 2009. On average, the commodity has been trading at the US$17,000 per tonne level. It touched a high of US$18,666 per tonne in April before coming down to US$17,500 per tonne last Friday.

A tin analyst said tin prices would stay strong at current levels but “will not reach the all-time high at US$24,040 per tonne recorded in 2008.”

There is still fear over supply tightness. This is view of the ongoing move by Indonesia, the world’s largest tin exporter, to clamp down on illegal mining and depletion of onshore mines at its Bangka-Belitung islands off Sumatra after centuries of unregulated mining, the analyst said.

On the local front, the latest interesting development is the Perak government’s intention to revive tin mining operations in the state and potential review of its mining policy.

(biz.thestar.com.my)





Growers oppose natural rubber import duty cuts
Posted: 06 Jun 2010 07:38 PM PDT
By Lakshmi Krishnakumar
New Delhi, June 6 (IANS) Young farmers in northeast India are a concerned lot after the Delhi High Court asked the government to “consider carefully” the user industry’s demand to bring down import duty on natural rubber - a move that they feel can disturb peace.

“Bringing down the import duty will adversely affect us farmers. We are small growers and not capitalists. We depend on larger inputs from a small area of cultivation,” said John Millik, 26, a farmer from Karbi Anglong district of Assam.

The May 17 high court order came on a petition filed by the Indian Cycle and Rickshaw Tyre Manufacturers Association, the Automotive Tyre Manufacturers Association and the All India Rubber Industries Association.

They urged the court to ask the government to regulate natural rubber prices by removing duties, fixing a price band and banning futures trade in the commodity. They also want the import duty on natural rubber to be brought down from 20 percent to 7 percent.

Millik feels that along with economic growth and development, rubber has helped curb separatism and insurgency to an extent in the region.

“Most youths are unemployed, illiterate and poor, and are easily persuaded to hold arms. But with cultivation that is sustaining and rewarding like rubber, extremism has come down to a certain level.

“Prospects of rubber plantation motivated us to take up this cultivation and I think the trend will grow, if the prices do not fall,” he said.

However, ATMA is pressing ahead with its demand, arguing that the import duty on finished product should be higher than the raw material itself.

An ATMA official said: “Usually the import duty on finished product is higher than the raw material but here the import duty on natural rubber (raw material) is 20 percent while on tyre (finished product) is only 10 percent.

“If that is not possible, then we demand the import duty on tyre to be increased,” he added.

The rubber growers have slammed the user industry’s demands.

The Indian Rubber Growers Association (IRGA) general secretary and vice chairman of the Rubber Board, Siby Monipally, told IANS that this was an attempt by the user-industry to regain supremacy in the rubber market to dictate prices to its advantage.

“They don’t want market forces to play its role. This is with an ulterior motive to damage rubber industry and interests of farmers in India,” Monipally said.

“Take the example of Kerala. Rubber is a Rs.10,000 crore industry there. Kerala was not affected by the global meltdown due to rubber cultivation. We have also recorded inclusive growth in the northeast,” he said.

The secretary and founder of the Mendhpather Multipurpose Cooperative Society in Meghalaya, sister Rose Kayathinkara, said: “I initiated rubber cultivation in Garo Hills. The development we have witnessed has been steady and progressive. The import duty in no way should be brought down.

“The youth here has suffered a lot from poverty and unemployment and they end up being part of extremist groups but rubber cultivation has helped them think different and has generated employment and income to many,” she added.

There are an estimated 1.4 million farmers in India and almost seven million households that benefit from the cultivation indirectly generating employment opportunities.

“Rubber plantation has a gestation period of at least seven years. So for the growth level to be sustained, the market prices have to be favourable to small growers,” Monipally said.

Members of IRGA and the rubber board will meet Prime Minister Manmohan Singh and Commerce Minister Anand Sharma with requests to maintain import duty at 20 percent and not ban futures trading on natural rubber.

(thaindian.com)