India to continue current duty on rubber import--bad news for Indian manufacturers

India to continue current duty on rubber import
Posted: 23 Jul 2010 05:53 AM PDT
MUMBAI (Commodity Online): India rejected the industry’s demand for a cut on natural rubber imports from 20% to 7.5%, said a statement of Rubber Board of India.

A panel, set up on the directives of the Delhi High Court, headed by the Rubber Board Chairman Sajen Peter, has decided to continue present import duty for natural rubber.

However, the panel, called for a mechanism to cap the customs duty burden on the consuming industries by levying the duty at a benchmark level, irrespective of global prices.

According to director general of the Automotive Tyre Manufacturers Association, Rajiv Budhraja, Demand for natural 41 rubber in India, the world's second-largest consumer, is growing by around 12% a year, but production is only expanding at 5%-6%.

During the January-June period, the country imported 836,093 tons of natural rubber, up 1% from a year earlier. China is the world's biggest importer of natural rubber. It purchases most of its supplies from Thailand, Indonesia a Malaysia, the world's leading natural rubber producers.

General Administration of Customs, China's natural rubber imports in June declined 12% from a year earlier to 115,752 metric tons. Imports were up 25% from 92,702 tons in May.

According to government and industry sources, India's imports of natural rubber will likely rise in the current fiscal year as local production is growing at a much slower pace than demand, mainly from tire makers.

(commodityonline.com)





Synthetic rubber imports rise by 51.6% in April
Posted: 23 Jul 2010 05:52 AM PDT
Imports of synthetic rubber rose by 51.6 per cent to 25,885 tonnes in April on strong demand mainly by the tyre industry, the Rubber Board said today.

Synthetic rubber imports stood at 17,065 tonnes in the corresponding period last fiscal, the board said.

The production of synthetic rubber in the country increased marginally to 8,180 tonnes in April this year against 8,169 tonnes in April, 2009.

During the month under consideration, the total consumption of synthetic rubber grew up by 24.7 per cent to 78,250 tonnes compared to 73,470 tonnes in the comparable month period last fiscal.

The consumption of synthetic rubber by the automotive tyre sector, which accounts for more than half of the rubber use in the country, increased by 31.6 per cent to 22,872 tonnes in April, 2010 against 17,373 tonnes in the corresponding period last year.

(indiainfoline.com)


Rubber Gains From 6-Week Low as Stock Rally Boosts Confidence
Posted: 22 Jul 2010 08:29 PM PDT
By Aya Takada

July 23 (Bloomberg) -- Rubber recovered from a six-week low as Asian stocks extended a global rally, boosting investor confidence in economic growth and raising speculation that demand will increase for the commodity used to make tires.

Futures in Tokyo climbed as much as 3 percent after slumping yesterday to the lowest level since June 9. The price also increased as a drop in the Japanese currency against the dollar raised the appeal of yen-based contracts.

Asian stocks increased, driving the MSCI Asia Pacific Index to its third straight weekly advance, as U.S. companies from AT&T Inc. to United Parcel Service Inc. raised profit forecasts. The yen fell against all of its major counterparts on speculation Japanese policy makers may act to weaken the currency to support economic growth.

“Rubber chased a rally in stocks and other industrial commodities,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone. “Futures are also drawing support from the currency market.”

December-delivery rubber increased as much as 7.7 yen to 265 yen per kilogram ($3,047 a metric ton) before trading at 262.6 yen on the Tokyo Commodity Exchange at 10:55 a.m.

The MSCI Asia Pacific Index gained 1.3 percent to 117.10 as of 10:41 a.m., extending its increase this week. Japan’s currency, which yesterday traded within 0.1 yen of its 2010 high reached last week, retreated on the prospect that Prime Minister Naoto Kan’s administration will add pressure on the Bank of Japan to increase monetary easing measures.

Low Stockpiles

Rubber futures also increased amid speculation that low stockpiles in Japan may make physical delivery difficult when the nearby contract expires on July 26, Sugata said.

Natural-rubber stockpiles monitored by the Tokyo exchange dropped by 29 percent to 1,341 tons as of July 10, data from the bourse showed this week. It was the lowest volume since at least 2001, according to exchange spokesman Seiki Ichimura.

Speculators with short, or sell, positions in the nearby contract must buy them back by the expiry date, unless they can deliver the raw material. July-delivery rubber surged 4.3 percent to 372.5 yen. Last month, the June-delivery contract expired at 372 yen.

November-delivery rubber on the Shanghai Futures Exchange gained 2.1 percent to 22,065 yuan ($3,256) a ton at 10:04 a.m. local time.

Cash rubber prices in Thailand declined yesterday as Chinese buyers have put off orders and some investors are concerned that there’s a weaker pace of recovery in China and the U.S., according to the Rubber Research Institute of Thailand. The Thai benchmark price fell 1 percent to 103.65 baht a kilogram, the group said yesterday on its website.

(bloomberg.com)





Higher NR prices raise synthetic rubber demand
Posted: 22 Jul 2010 05:50 PM PDT
The rise in natural rubber (NR) price has reflected in a sharp increase in consumption of synthetic rubber (SR) in India, where NR is predominantly used for industrial applications.

The low price of SR, compared to NR, for the last couple of years has forced tyre majors to make a switch to SR. According to the latest trend in the consumption pattern, the current ratio of NR-SR consumption of 73:27 is likely to change to 70:30 in favour of SR by the end of the current financial year.

The Rubber Board data reveals that SR consumption increased to 347,710 tonnes during 2009-10 registering a growth of 18.7 per cent against a negative growth of 1.4 per cent attained in the previous year. The automotive tyre sector consumed 238,153 tonnes of SR during 2009-10 as against 185,094 tonnes during 2008-09, recording a growth of 28.7per cent.

The growth in the consumption of NR in 2009-10 was confined to 13.4 per cent. While a decline of 2.5 per cent was recorded in the consumption of NR by general rubber goods manufacturers (354,355 tonnes) last financial year, an increase of 1.6 per cent (109,557 tonnes) was registered in the consumption of SR.

The relative share of consumption of NR and SR in India changed to 73:27 during 2009-10 from 75:25 during 2008-09. The static or lower global production of NR has not only pushed the prices up, but it has also put the rubber-based industries on a tight spot.

The prices of various SR grades have, however, reduced due to the decline in the price of crude oil. During the last one year, the price of NR has increased more than 100 per cent as the local price of the bench mark grade RSS-4 touched a peak of Rs 185 a kg this month.

Natural rubber prices surged to a record high of more than $3,500 a tonne in the global market while SR rubber values are currently hovering around $2,500 a tonne on an average in the Asian markets.

The price hike has been a concern for leading NR growing nations, like Thailand, as they feel that big producers, like tyre companies, might switch over to synthetic rubber as they are cheaper. At present, European and US companies prefer SR to NR and their consumption ratio of SR:NR is 60:40. But the recent big shift towards SR in the Asean region has also added pressure on the price line on SR.

Natural rubber and synthetic rubber prices usually move in tandem as they are traditionally inter-dependent substitutes. Global synthetic rubber prices may surge on strong orders from tyre manufacturers looking for a cheaper alternative in raw material to natural rubber, industry sources said.

The rise in natural rubber prices added pressure to the tight synthetic rubber market, which was beset by spikes in cost of feedstock butadiene (BD).

BD prices had climbed by more than $200 a tonne over the past month to $2,000-2,050 a tonne.

“Natural rubber prices are going up so sharply that synthetic rubber makers have no choice but to raise their prices further,” a Chinese Styrene Butadiene Rubber (SBR) maker said. The price increase would likely lift costs for manufacturers that were heavily dependent on the commodity, particularly tyre makers. The use of synthetic rubber as an alternative may not offer much comfort since prices have also started to run up, market sources said.

Major synthetic rubber makers in Asia, including Kumho Petrochemical (KKPC), LG Chem, Zeon, BSTE of Thailand and PT Sentra of Indonesia, have all raised prices for fresh shipments for both the non-oil grade SBR and butadiene rubber (BR).

Fresh offers for SBR grade were $250- 350 a tonne higher from early March at $2,400-2,500 a tonne, while butadiene rubber (BR) surged to $2,800-2,850 a tonne, market sources said.

(business-standard.com)