Rubber Plunges to Two-Week Low on Worries Over Weak Demand

Rubber Plunges to Two-Week Low on Worries Over Weak Demand
Posted: 29 Jun 2010 11:29 PM PDT
By Aya Takada and Supunnabul Suwannakij

June 30 (Bloomberg) -- Rubber tumbled for a third day to more than two-week low on concern that demand for the commodity may weaken amid slow economic growth in China and the U.S.

December-delivery futures declined as much as 2.9 percent to at 266.5 yen ($3,011 a metric ton) on the Tokyo Commodity Exchange, the lowest since June 14. Prices are set for the first quarterly decline since the end of 2008.

Crude oil dropped for a third day on concern over weakening economic expansion in China and as confidence waned more than forecast among consumers in the U.S. Worries over the pace of global economic recovery still pressure market sentiment, said Felix Yeo, trading manager at the Singapore unit of Marubeni Corp. A decline in oil prices also dragged the rubber price lower, he added.

The Conference Board said yesterday its leading economic index for China climbed more slowly in April than previously estimated. The board’s U.S. confidence index in June was lower than all forecasts in a Bloomberg News survey. The Standard & Poor’s 500 Index dropped to its lowest level since October.

The December delivery contract fell 2.2 percent to 268.3 yen a kilogram as of 10:57 a.m. in Tokyo. The price advanced yesterday to 285.2 yen, the highest level since May 28, as rain disrupted output in Thailand, the biggest producer and exporter.

‘Downside Limited’

“The downside is limited as Japan and China have low inventories,” said Yeo. “Raw materials are still tight and that will easily push up the market again.”

Inventories in China declined to the lowest level in seven years, sparking optimism that the world’s biggest buyer may soon replenish inventories, data showed. Natural rubber stockpiles monitored by the Shanghai Futures Exchange dropped 1,670 tons to 14,771 tons, the bourse said on June 25. It was the lowest level since January 2003, according to Bloomberg data.

China, the largest auto market, is the biggest consumer of natural rubber. The nation may increase gross imports of the raw material to 1.68 million tons this year, from 1.59 million in 2009, according to a May report from the Association of Natural Rubber Producing Countries.

November-delivery rubber on the Shanghai Futures Exchange dropped 0.5 percent to 21,475 yuan ($3,162) a ton at 11:30 a.m. local time break.

Cash prices in Thailand declined as Chinese buyers have shifted to purchasing cheaper rubber from Indonesia, the Rubber Institute of Thailand said on its website yesterday. The Thai benchmark price dropped 0.6 percent yesterday to 118.10 baht ($3.67) a kilogram, it said. Price will be updated in the afternoon.

(bloomberg.com)





Rubber Futures in Tokyo Drop as Much as 2.9% to 266.5 Yen/Kg
Posted: 29 Jun 2010 11:28 PM PDT
By Aya Takada
June 30 (Bloomberg) -- Rubber futures in Tokyo declined as much as 2.9 percent after crude oil slumped. The December- delivery contract dropped to 266.5 yen a kilogram at 9 a.m.
(Bloomberg.com)






Apollo Tyres to hike prices next week
Posted: 29 Jun 2010 11:25 PM PDT
Apollo Tyres today said it will increase the prices of its products next week, the fourth such instance since January, on account of the rising cost of natural rubber.

"Natural rubber prices are increasing day by day and to offset the pressure, we will increase the prices of our tyres. We will be announcing the exact quantum of price hike next week," Apollo Tyres Chief Financial Officer Sunam Sarkar told PTI.

The company has hiked prices thrice this year so far, in January, May and June. Overall, the prices of tyres across segments have increased by 8 per cent to 10 per cent this year.
The prices of Apollo Tyres' products are likely to be raised on both the OEM (original equipment manufacturers) side and the retail side.

The price of the company's passenger car tyres ranges from Rs 1,200 to Rs 10,000, while its commercial vehicles tyres cost around Rs 8,000 to Rs 15,000 per unit. Its total domestic capacity is about 1,000 metric tonnes a day.

Tyre prices have been increasing in the recent past due to rising natural rubber costs. All manufacturers have hiked prices by about 10 per cent since January this year. A further hike of up to 25 per cent in tyre prices during the remainder of this fiscal has been signalled by the industry.

Natural rubber prices have increased by over 150 per cent during the last one-and-a-half years, touching Rs 170 per kilogram from Rs 65 per kilogram in December, 2008.

(business-standard.com)





Decline in spot rubber prices
Posted: 29 Jun 2010 11:22 PM PDT
On Tuesday (29 June 2010), the spot rubber prices declined following the decline in the domestic and international rubber futures. Sheet rubber declined to Rs 179.25 from Rs 180 per kg mainly on profit booking at higher levels.

The July futures for RSS 4 declined to Rs 178.30 (180.75), August to Rs 172.10 (173.73), September to Rs 165.21 (166.69) and October to Rs 161 (162.63) per kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 179.25 (180); RSS-5: 177 (178); ungraded: 174 (176); ISNR 20: 157 (158) and latex 60 per cent: 127 (127).

(indiainfoline.com)

Spot rubber rules firm
Aravindan

Kottayam, June 30

Physical rubber prices ruled firm on Wednesday. Sheet rubber improved to Rs 179.75 from Rs 179.25 a kg on covering purchases. Selling subsided as domestic futures bounced back with moderate gains but decline in the global rubber continued to cast its shadow over the sentiments. The trend was mixed and the volume low.

Futures gain

RSS 4 flared up with the July futures rising to Rs 184.53 (178.37), August to Rs 176.60 (172.34), September to Rs 169 (165.23) and October to Rs 164.70 (161.03) a kg for on the National Multi Commodity Exchange. The July futures weakened further to ¥343\Rs 179.54 (¥348.4), August to ¥315.7 (¥321.8), September to ¥299.8 (¥305.6), October to ¥279.1 (¥286.3), November to ¥270.9 (¥277.7) and December to ¥269.2 (¥274.4) a kg for RSS 3 during the day session on the Tokyo Commodity Exchange. The September futures recovered partially to ¥301, October to ¥281.3, November to ¥275.1 and December to ¥272.8 a kg while the July and August futures remained inactive on late trades. RSS 3 (spot) moved down to Rs 166.26 (168.76) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 179.75 (179.25); RSS-5: 177 (177); ungraded: 174.50 (174); ISNR 20: 158 (157) and latex 60 per cent: 127 (127).