Rubber, trading unchanged, may climb for a second day on speculation that demand may increase as China and Japan replenish declining inventories.
Futures in Tokyo swung between a gain and loss of 0.6 percent. The price touched 260.3 yen per kilogram ($2.962 a metric ton) on July 2, the lowest level since June 10, on concern that a slowing global economic recovery may weaken demand for the commodity used for tires and gloves.
“Warehouse stocks in Japan and China are low,” Kazunori Kokubo, general manager of the international business department, at commodity broker Yutaka Shoji Co., said by phone from Tokyo. “People are eyeing Thai supply conditions,” he said.
The December-delivery contract rose as much as 1.6 yen to 268.2 yen, before trading unchanged at 266.6 yen on the Tokyo Commodity Exchange at 11:04 a.m. local time. The commodity has declined 3.4 percent since the start of the year.
China’s natural-rubber inventories increased 1,211 tons to 15,982 tons last week, based on a survey of 10 warehouses, the Shanghai Futures Exchange said on July 2. Still, stockpiles have slumped 89 percent this year.
November-delivery rubber on the Shanghai Futures Exchange gained 1.2 percent to 21,630 yuan ($3,193) a ton.
Tight global supplies and strong demand, especially from China, will support prices, the Association of Natural-Rubber- Producing Countries said in its June newsletter.
The possibility of a “marked improvement” in supply in the short term is limited given aging trees and weather constraints, the association said June 30.
Cash prices in Thailand fell on July 2 after U.S. economic data boosted concern that the global recovery may falter, according to the Rubber Institute of Thailand.
The Thai benchmark price tumbled 2.6 percent to 112.60 baht ($3.47) a kilogram that day. Prices are updated daily in the afternoons.
Spot rubber prices steady
Kottayam, July 3
Spot rubber finished unchanged on Saturday. According to sources, there were no fresh triggers to keep the traders active as the domestic futures closed slightly lower on NMCE. Sheet rubber continued to rule steady at Rs 182.50 a kg amidst scattered transactions.
Futures firm
In futures, the July series slipped to Rs 184.81 (185.10), August to Rs 173.90 (174.75), September to Rs 165.16 (166.25) and October to Rs 161.50 (162.99) a kg for RSS 4 on the National Multi Commodity Exchange.
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).
Auto industry sees strong growth in first quarter
Excise duty hike, higher prices due to emission norms drive growth.
Chennai, July 4
The automobile industry has ended the first quarter on a strong note, with all the listed companies registering robust growth in vehicle sales over the same period last year. The industry is now hoping for a good southwest monsoon and continued economic growth to sustain sales over the rest of the financial year.
Industry experts point out that the strong first quarter performance comes on the back of an excise duty increase and an increase in vehicle prices due to switching over to tighter emission norms. Concerns, however, remain in the form of rising input costs and supply constraints faced by the vendors.
Maruti Suzuki India Ltd, which commands more than a half of the country's passenger car market, saw its sales increase by 25 per cent in the first quarter, over the first quarter of the previous financial year.
Tata Motors' total vehicles sales increased by 48 per cent while utility vehicle manufacturer Mahindra & Mahindra's auto sales were up 31 per cent.
Ashok Leyland nearly tripled its sales this quarter over the April-June 2009 period, when the commercial vehicle industry was yet to recover from the downturn.
Most vehicle manufacturers are optimistic of a good performance this financial year. The passenger car industry expects to grow at least 15 per cent.
Worries
The automobile manufacturers are worried that the component industry has not been able to ramp up production quickly enough, to meet the rising demand. Also, prices of raw materials such as steel and tyre and castings have gone up.
The industry has not been able to pass on the cost increase fully due to the fear that it will dampen sentiment. Ashok Leyland, for instance, last week increased vehicle prices by about three per cent – by Rs 20,000-50,000 – to partially cover the rise in input costs.
Experts expect the passenger vehicle and two-wheeler segments to grow during the year by 13-15 per cent, mainly because of a higher base. The commercial vehicle industry, on the other hand, is likely to post a strong year-on-year growth.
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