Spot rubber prices rule steady

Spot rubber prices rule steady

Kottayam, June 18

Spot rubber continued to rule steady on Friday.

The market lost its direction as reports from the domestic and international futures were not favourable. The absence of genuine buyers and quantity sellers kept the commodity almost neutral and sheet rubber finished steady at Rs 169 a kg amidst scattered transactions.

Futures weaken

The July futures weakened to Rs 167.50 (Rs 168.59); August to Rs 162.65 (Rs 164.12) and September to Rs 158.50 (Rs 159.76), while the October series improved marginally to Rs 156.60 (Rs 156.55) a kg for RSS 4 on National Multi Commodity Exchange.

The June futures for RSS 3 closed at ¥354.0/ Rs 180.26 (¥353.5); July at ¥342.0 (¥342.6); August at ¥322.7 (¥322.6); September at ¥301.1 (¥ 301.2); October at ¥281.3 (¥281.9) and November at ¥274.4 (¥275.3) a kg during the day session on Tokyo Commodity Exchange.

The June futures for the grade finished unchanged at ¥354.0 while the July futures slipped to ¥340, August to ¥321.5; September to ¥ 300.0; October to ¥279.9 and November to ¥272.8 a kg on late trades. RSS 3 (spot) increased marginally to Rs 168.64 (Rs 168.20) a kg at Bangkok.

The physical rubber prices a kg are RSS-4: Rs 169.50 (Rs 169.50) RSS-5: Rs 167 (Rs 167) Ungraded: Rs 165.00 (Rs 165); ISNR 20: Rs 150.50 (Rs 150.50) and latex 60 per cent: Rs 120 (Rs 120).




Sri Lanka seeks to raise rubber output with rain guards
Posted: 17 Jun 2010 11:22 PM PDT
Sri Lanka is to encourage small farmers tapping rubber to use rain guards to reduce production disruption by rain and provide more supplies for industry helped by high prices, an official said.
Plantations industries minister Mahinda Samarasinghe said that in some parts of the island lashed by heavy rains recently tappers were able to tap trees for only five days a month, sharply reducing output.
Rubber estates run by government research institutes which used rain guards were able to make good profits, he said.

"So we want to make rain guards more available, especially to encourage rubber small holders to use them," he told a news conference.

"Then we can increase rubber production, raise farmer incomes while ensuring enough supplies are available for industry."

About 72,000 small farmers cultivate rubber on 33,000 hectares in the island while listed plantations companies cultivate another 50,000 hectares.

Samarasinghe said even among the plantations firms use of rain guards was inadequate.

Sri Lanka's total rubber production is now around 130,000 tonnes and the country is estimated to need 150,000 tonnes by 2015, Samarasinghe said.

Small farmers are likely to be the main suppliers of rubber in future, he said.
Local consumption of rubber by industry has risen sharply in recent years.

In 1980 only 10 percent of rubber was used locally.

Today 80 percent of production is used by local industries which have had to cope with record prices in recent month owing to global shortages and rising demand..

(lankabusinessonline.com)





Malaysian Rubber Output Likely To Increase 17%: Malaysian Rubber Board
Posted: 17 Jun 2010 11:21 PM PDT

Capital Market / 14:59 , Jun 17, 2010
Natural rubber output in Malaysia, the world's third- largest grower, may surge 17 percent this year as rising prices prompt farmers to increase tapping, offsetting crop damage from drought, the Malaysian Rubber Board said.

Natural rubber production this year may climb to as much as 1 million metric tons, Salmiah Ahmad, director general of the Malaysian board, said. That is more than the 900,000 tons forecast by the nation's Plantation Industries and Commodities Ministry in May. Output last year was 856,189 tons.

Price Movement:
Rubber declined for the first time in six days as a stronger Japanese currency reduced the appeal of yen-denominated contracts and output in major producing countries increased. Futures in Tokyo dropped after reaching a two-week high yesterday. The yen advanced amid concern that Europe's debt crisis will impair the region's economic recovery, boosting demand for Japan's currency as a refuge.

(indiainfoline.com)





Spot rubber ends steady
Posted: 17 Jun 2010 11:20 PM PDT
The spot rubber prices ended steady on Thursday (17 June 2010). The market activities almost hit the bottom line as the traders were mostly reluctant to enlarge their commitments. Sheet rubber ended flat at Rs 169 per kg amidst extremely thin volumes.

The July futures for RSS 4 declined to Rs 168.52 (166.00), August to Rs 164.25 (160.95), September to Rs 159.93 (156.75) and October to Rs 156.55 (154.97) per kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 169.50 (169.50); RSS-5: 167 (167); ungraded: 165 (165); ISNR 20: 150.50 (150.50) and latex 60 per cent: 120 (120).


Rubber Producers Can Team up to Stabilize Price, Minister Says
Posted: 17 Jun 2010 11:29 PM PDT
By Supunnabul Suwannakij

June 18 (Bloomberg) - Key producers of natural rubber in Southeast Asia should establish a regional rubber market to minimize the impacts of “excessive speculation” on prices, a Malaysian government official said.

“With excessive speculation, it’s timely for major producing countries including Thailand, Indonesia and Malysia to consider setting up an Asean regional rubber market to stabilize rubber prices guided by supply and demand,” said Hamzah Zainudin, deputy minister of Plantation Industries and Commodities, in a speech at a conference in Kuala Lumpur today.

(bloomberg.com)





Rubber Demand, Output May Miss Forecast on Crisis, Bad Weather
Posted: 17 Jun 2010 11:28 PM PDT
By Supunnabul Suwannakij

June 18 (Bloomberg) -- Rubber consumption this year may be slower than earlier estimated as Europe’s debt crisis likely slows the global economic recovery and adverse weather curbs production, the International Rubber Study Group said.

Demand will probably increase by 4.4 percent this year to 9.8 million metric tons, based on the assumption that the economic recovery will slow, Stephen Evans, the group’s secretary-general, said in an interview. That’s lower than the group’s March forecast of 10.2 million tons.

“Demand certainly continues but the pace will depend on the European sovereign debt position,” Evans said in Kuala Lumpur. “We’re not bullish on production because of weather impacts.”

Drought caused by the El Nino weather phenomenon, which parches crops in Asia, coupled with a concern over wet weather caused by La Nina during the dry season in Indonesia, the second-biggest producer, will likely limit production growth this year, Evans said.

Global output may total 9.7 million to 10.2 million tons this year as drought and heavy rains in key producing countries curbs supply, Evans said. That compares with the group’s forecast of 10.1 million to 10.6 million tons on March 17.

Rubber futures in Tokyo have slumped about 19 percent since reaching a 21-month high on April 16 on concerns that the European debt crisis will weaken demand for the commodity used in tires. Prices had surged on optimism that economic expansion in Asia and record auto production in China, the biggest vehicle market, would drive consumption.

La Nina

November-delivery rubber was little changed at 275.2 yen a kilogram ($3,027 a metric ton) at 12:19 p.m. local time on the Tokyo Commodity Exchange today after losing as much as 1.1 percent earlier.

La Nina conditions are increasingly likely to develop this year, Australia’s Bureau of Meteorology said on June 9. La Nina, which causes wetter-than-usual weather in Asia, can benefit or damage crops depending on the severity of the preceding El Nino event.

“Unfavorable weather will have a negative influence on supply” in June and July, supporting prices, Jom Jacob, senior economist at the Association of Natural Rubber Producing Countries said in an interview yesterday. “June is supposed to be a dry month for Indonesia and India but the monsoon is going on there, disrupting tapping.”

Still, “prices may slide to 220 yen a kilogram around September to October, according to technical signals,” said Zbigwiew Tan, trading representative at commodity broker Okachi (Malaysia) Sdn Bhd. Prices will be pressured by the European debt crisis, which may eventually spill over to the U.S. and China markets, Tan said.

China Demand

“Europe remains depressed,” said Evans. “But we are less concerned about China as demand is still growing.”

China’s automobile output this year may grow by as much as 15 percent, expanding from a record, to 15 million units, Gu Xianghua, deputy general secretary of the China Association of Automobile Manufacturers said May 29. Vehicle sales surged 46 percent to 13.6 million units last year, overtaking the U.S. as the world’s biggest auto market.

Robust consumption from China, India, Southeast Asia and Brazil will probably boost demand growth this year by 12.6 percent to 10.6 million tons, said Prachaya Jumpasut, managing director of London-based consultancy company The Rubber Economist. That would lead to a supply deficit of around 476,000 tons this year, he said.

The supply-and-demand situation will be “largely balanced,” said Evans. Consumption may rise from as much as 10.7 million tons next year to as high as 14.2 million tons in 2020. Production next year may reach 10.7 million tons, climbing to 14.2 million to 14.3 million tons in 2020, he said.

(bloomberg.com)





Rubber Prices to Stabilize at $3 a Kilo, Group Says
Posted: 17 Jun 2010 11:28 PM PDT
By Supunnabul Suwannakij

June 18 (Bloomberg) -- Rubber prices in the top three producing countries will probably “steady” for the next two months, supported by strong demand and supply “tightness,” according to the International Rubber Consortium Ltd.

“Prices should be steady around $3 a kilogram through the next two months,” Abdul Rasip Latiff, chief executive officer of the consortium, which represents growers and exporters in Thailand, Indonesia and Malaysia, said in an interview today.

“The European crisis may slow the economic recovery, but the demand is still there. Auto sales and tire sales are still up,” he said.

Supply has not improved as much as expected after the annual February-to-April low-production period because dry weather has reduced latex output, he said.

“There is tightness in supply, especially from Thailand and northern Malaysia,” Rasip said.

China’s automobile output this year may grow by as much as 15 percent, expanding from a record to 15 million units, Gu Xianghua, deputy general secretary of the China Association of Automobile Manufacturers said May 29. Vehicle sales surged 46 percent to 13.6 million units last year, overtaking the U.S. as the world’s biggest auto market, fueling demand for the commodity used to make tires.

Key rubber producers in Southeast Asia should establish a regional market to minimize the impacts of “excessive speculation” on prices, Hamzah Zainudin, Malaysia’s deputy minister of Plantation Industries and Commodities, said in a speech in Kuala Lumpur today.

Market ‘Timely’

“With excessive speculation, it’s timely for major producing countries including Thailand, Indonesia and Malaysia to consider setting up an Asean regional rubber market to stabilize rubber prices, guided by supply and demand,” he said.

Rubber futures in Tokyo have slumped about 19 percent since advancing to a 21-month high on April 16 on optimism that economic expansion in Asia and record auto production in China will drive demand.

November-delivery rubber was little changed at 275.2 yen a kilogram ($3,027 a metric ton) at 12:19 p.m. local time on the Tokyo Commodity Exchange today after losing as much as 1.1 percent earlier.

(bloomberg.com)