Spot rubber prices rule steady

Spot rubber prices rule steady


Kottayam, July 2

Spot rubber prices finished unchanged on Friday. The domestic rubber futures continued to explore further highs but the spot market failed to move up as most of the traders were hesitant to buy above the existing levels. Sheet rubber ruled steady at Rs 182.50 a kg but the undercurrent was firm as it lacked quantity sellers even at higher levels. The NMCE rubber futures witnessed gains in all series except September contract.

Futures firm

The July series firmed up to Rs 185.10 (183.86), August to Rs 174.75 (174.43), and October to Rs 162.99 (162.62) while the September series slipped to Rs 166.25 (166.83) a kg for RSS 4. RSS 3 improved with the July futures to ¥342.4\Rs 182.50 (¥339), August to ¥314.1 (¥311.7), September to ¥297 (¥294.5), October to ¥275.5 (¥273.1), November to ¥269.2 (¥266.1) and December to ¥266.6 (¥264.7) a kg for RSS 3 during the day session on the Tokyo Commodity Exchange. The July futures closed at ¥343 (Rs 182.92), August at ¥313.5, September at ¥298.3, October at ¥276.1, November at ¥269 and December to ¥266.4 a kg on late trades. RSS 3 (spot) weakened to Rs 162.40 (163.91) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 182.50 (182.50); RSS-5: 178 (178); ungraded: 176 (176); ISNR 20: 160 (160) and latex 60 per cent: 127 (127).


Rubber production rises 5% in June
Rain-guarding acts as catalyst.

Kochi, July 2

Rubber production increased five per cent in June.

The production rise was mainly due to increased soil humidity on account of the monsoon rains, attractive prices, more area under rain-guarding and enhanced tapped area.

Increase in tapped area has come about as more trees are attaining maturity extending tapping operations in new areas.

On this count, an additional 9,000 hectares are expected to come under tapping last year which is expected to surge to 12,000 hectares this year, sources in the Rubber Board said.

Rapid tapping

It was the price increases since 2005 which prompted the rapid extension of planting operations and the trees are now attaining maturity after seven years.

The increase in tapped area is expected to double to 22,000 hectares in 2014-15. But by global standards, India is still far behind other major producing countries as far as extension of area is concerned.

Similarly, the increase in area under rain-guarding has also been directly related to the prices.

The trees under rain-guarding that were expected to be less than 20 per cent in 2005 is estimated to have gone up to around 70 per cent now, Rubber Board sources said.

Rubber production is estimated to have increased to 57,000 tonnes (54,255 tonnes) in June.

Stagnant consumption

There was no significant growth in consumption in June, estimated at 75,000 tonnes (74,220 tonnes). This was partly due to the fact that manufacturers in the non-tyre sector seem to have moved out of the market altogether, due to the high prices. Consumption in the non tyre sector is price sensitive and the consumers defer their purchases when the prices of the products shoot up.

Import down

Import also declined rapidly to 9,255 tonnes (20,258 tonnes) on account of the high prices.

Although the trend has reversed in recent days, the price of natural rubber in the international markets were quoting higher than domestic prices till June 8. However, consumption has steadily overtaken production during April-June period.

Much of the increased consumption was met from the available stocks rather than imports.

Rubber stocks are estimated to be of the order of 2,16,554 tonnes at the end of June. By the end of the year, the stocks are expected to decline to 1,83,000 tonnes.

Although Indian rubber production is projected to fall lower than consumption for 2010-11, much of the deficit is expected to be met from the stocks available in the country.



Rubber Gains, Rebounding From 3-Week Low as China Replenishing Inventories
Posted: 02 Jul 2010 06:11 AM PDT
Rubber rebounded after sliding to the lowest level in three weeks as Chinese buyers began replenishing the lowest inventory level since 2003.

Futures in Tokyo advanced as much as 1.1 percent after earlier falling to the lowest since June 10. The price has slumped 6.4 percent this week, the biggest drop since the week ended May 7, on concerns over the health of the global economy.

“Bargain hunting after recent sharp falls erased losses in the market,” Katsumi Kinoshita, senior manager of the institutional department at Okata Shoji, said from Kobe. “Some investors stepped in on the hope that China would build up its low stockpiles,” he added.

The December-delivery contract rose as much as 2.8 yen to 267.5 yen per kilogram ($2,041 a metric ton) before settling at 266.6 yen on the Tokyo Commodity Exchange.

November-delivery rubber on the Shanghai Futures Exchange gained 0.2 percent to settle at 21,385 yuan ($3,157) a ton.

China’s natural rubber inventories increased 1,211 tons this week to 15,982 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said today.

Tight Supply

Tight global supply amid strong demand, especially from China, will support prices, the Association of Natural Rubber Producing Countries said in its June newsletter.

The possibility of any “marked improvement” in supply in the short term is limited, given aging rubber trees and weather constraints, the association said June 30.

Worries over a slowdown in the U.S. economy raised concern that demand for the commodity may weaken, pressuring rubber prices earlier today.

“U.S. data this week added to speculation that the economic recovery may stall,” Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co., said today by phone.

Reports on U.S. manufacturing, employment and home sales pointed to slower growth in the second half of the year, just as government spending to stimulate the economy begins to wane. Economists said data today will show the jobless rate in the world’s largest economy rose for the first time this year.

Cash prices in Thailand declined as investors were disappointed with U.S. economic data and worried about the global economic recovery, the Rubber Institute of Thailand said on its website today. The Thai benchmark price tumbled 2.6 percent today to 112.60 baht ($3.47) a kilogram, it said.

(bloomberg.com)





Rubber imports dipped in June due to high global prices
Posted: 02 Jul 2010 06:08 AM PDT
Natural rubber imports last month declined by more than half at 9,255 tonnes due to higher global prices, the latest Rubber Board data revealed today.

India had imported 20,258 tonnes in the same month last year. "Import of natural rubber decreased in June 2010 as the international price of sheet rubber was higher till June 8 than the domestic price," a senior rubber board official said.

The rubber price (RSS-3 variety) at Bangkok market was hovering between Rs 169-181 per kg during June 1-8 period, while the domestic rate was in the range of Rs 166-169 per kg.
According to the data, domestic natural rubber production this year rose by five per cent to 57,000 tonnes in June as compared to 54,255 tonnes in the same month last year.

"Production increased last month on account of an increase in the tapped area (and) increased percentage of rain guarding during 2010-11, anticipating attractive price in the monsoon season," the official said.

Consumption grew marginally to 75,000 tonnes during June, 2010, compared to 74,220 tonnes in June, 2009.

For FY 2010-11, Rubber Board has projected rubber production to grow by 7.4 per cent at 8.93 lakh tonnes against 8.31 lakh tonnes in last fiscal while the domestic consumption is estimated to rise to 9.78 lakh tonnes this fiscal against 9.30 lakh tonnes in FY 2009-10.

Natural rubber import is projected to fall to 70,000 tonnes in 2010-11 from 1.7 lakh tonnes last fiscal, while exports are expected to almost double at 50,000 tonnes in the review period.

(business-standard.com)





Rise in spot rubber prices
Posted: 02 Jul 2010 06:07 AM PDT
On Thursday (01 July 2010), the spot rubber prices rose as the markets seemed to be gaining strength to narrow down the gap between the near month July series on the National Multi Commodity Exchange though the global markets were bearish. Sheet rubber increased to Rs 182.50 from Rs 179.75 per kg on fresh buying and short covering.

The July futures for RSS 4 declined to Rs 183.75 (184.58), August to Rs 174.13 (176.64), September to Rs 166.54 (169.11) and October to Rs 162.60 (164.47) per kg on the National Multi Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 182.50 (179.75); RSS-5: 178 (177); ungraded: 176 (174.50); ISNR 20: 160 (158) and latex 60 per cent: 127 (127).

(indiainfoline.com)