Spot rubber prices weaken

Spot rubber prices weaken
Our Correspondent

Kottayam, July 15

Spot rubber prices weakened on Thursday. The market remained under pressure as the trend setting domestic and international markets were bearish.

Sheet rubber declined to Rs 184.25 from Rs 185 a kg, while the remaining grades except latex 60 per cent also slipped in tune with the day's sentiments. The July series for RSS 4 expired at Rs 187 (Rs 192.31), while the August series slipped to Rs 179.95 (Rs 180.78), September to Rs 170.75 (Rs 171.86) and October to Rs 165.40 (Rs 166.64) a kg on the National Multi-Commodity Exchange.

TOCOM FUTURES UP

RSS 3 improved with the July futures rising to ¥347.8 \ Rs 184.01 (¥343) while the August futures weakened to ¥293.9 (¥296.8), September to ¥ 282.8 (¥284.8), October to ¥ 268.8 (¥270.2), November to ¥ 264.1 (265.7), and December to ¥ 262.4 (264.2) a kg during the day session on the Tokyo Commodity Exchange.

RSS 3 (spot) fell further to Rs 153.05 (Rs 155.27) a kg at Bangkok.

Spot rubber rates (Rs/kg) were: RSS-4: 184.25 (185); RSS-5: 179 (Rs 179.50); ungraded: Rs 173.50 (Rs 174.50); ISNR 20: Rs 161.50 (Rs 162.00) and latex 60%: Rs 126 (Rs 128).




Rubber industry seeks level playing field from Govt panel
“The domestic natural rubber prices are ruling higher in the case of block rubber and sheet rubber. But the industry cannot benefit from the lower international prices in view of the hefty import duty of 20 per cent.”

Our Bureau

Kochi, July 15

Various sections of the rubber industry have reiterated their demand for reduction in import duty on natural rubber so that they can be on an equal footing with the Chinese manufacturers in accessing natural rubber at cheaper rates.

The All India Rubber Industries Association (AIRIA), Automotive Tyre Manufacturers' Association (ATMA) and Indian Cycle and Rickshaw Tyre Manufacturers (ICRTMA), which together account for 100 per cent of rubber consumption in the country, have just completed their hearing with the Government appointed panel, headed by Mr Sajen Peter, Chairman of Rubber Board. The panel is slated to submit the report by July 19.

According to Mr Rajiv Budhraja, Director-General of ATMA, the domestic natural rubber prices are ruling higher in the case of block rubber and sheet rubber.

But the industry cannot benefit from the lower international prices in view of the hefty import duty of 20 per cent, which at current prices works out to around Rs 35 a kg.

Stiff competition

“China, on the other hand, has lowered the import duty drastically and it currently stands at just 6.8 per cent. Accordingly, Chinese manufacturers are able to access natural rubber at much lower prices, in the process reducing their production cost. “On the other hand, high production cost in view of exorbitant natural rubber prices is eroding the cost competitiveness of Indian manufacturers,” Mr Budhraja added.

Now that the Government has lifted the restrictions on tyre imports, not only are Indian exports threatened by the cheaply made Chinese tyres but they are also poised to swarm the Indian markets. The three associations had petitioned the Delhi High Court to impress upon the Government to regulate natural rubber prices.

The High Court had directed the Ministry of Commerce and/or the Rubber Board to consider the representations made by different sections of the rubber industry, a press release has said.

The court is of the considered view that the Ministry of Commerce and/or the Rubber Board should consider the several representations made by the petitioners. Preferably, the representations of each of the petitioners shall be given a hearing, and thereafter a detailed order be passed on the representations giving the reasons for the decision, the High Court said.




Rubber production expected to rebound with 9% growth
Posted: 14 Jul 2010 11:32 PM PDT
RUBBER PRODUCTION in the country is expected to increase by 9% this year in the face of revived demand, an Agriculture official said yesterday.

High Value Commercial Crops program director Rene Rafael C. Espino told reporters that "this year, rubber is seen to increase 9% [because of] high demand."
The increase is being projected even after rubber production dropped by 8.58% in the first quarter of the year to 58,240 metric tons (MT) from the 63,710 MT recorded in the same period in 2009, data from the Bureau of Agricultural Statistics (BAS) show. In 2009, production dipped 0.83% to 407,640 MT from 411,040 MT, the data showed.
Mr. Espino attributed the slump in the industry to dampened demand amid a global economic crisis. He said revived demand from recovering overseas markets is expected to be reflected in industry sales this semester.
Officers of the Philippine Rubber Industries Association, Inc. could not be reached to validate the department’s forecast, though the government reported last month that production of rubber and plastic products grew 22.5% in April.
Still, Mr. Espino cited the need to improve product quality. He said, the department plans to buy modern rubber processing equipment to help producers upgrade their products. "We are now trying to get equipment for the village-level processing in order for us to have better quality products," Mr. Espino said.
Mr. Espino said the department will purchase processing equipment that will transform cup lumps, which make up bulk of the country’s rubber products, into higher-value rubber sheets. This, in turn, is expected to raise demand for them for industrial and automotive use.
Mr. Espino said that most of the rubber plantations in the country are located in Mindanao, and that the department is looking at other areas. "We’re scouting for areas that will be very suitable for rubber now, we’re looking at Palawan as a potential area for expansion," Mr. Espino said.
He added that rubber plantations require investments of $2,500-$3,000 per hectare, which cover planting, harvesting and processing of the product.
To be sure, the government has long recognized the need to upgrade the country’s rubber products.
Last May, former president and now Pampanga Rep. Gloria M. Arroyo (2nd District) signed into law Republic Act No. 10089, forming the Philippine Rubber Research Institute -- to be based at the Mindanao State University in Naga, Zamboanga de Sibugay -- to provide research and development support to the industry.
Agriculture department data showed that the country’s rubber industry supplied just 1.05% of global demand in 2004. The industry lags behind counterparts in Indonesia and Malaysia, which started to plant rubber in 1905 -- around the same time as the Philippines.

(bworldonline.com)





ANRPC lowers global rubber supply outlook for 2010
Posted: 14 Jul 2010 11:31 PM PDT
MUMBAI (Commodity Online): The ANRPC lowered its forecast of growth for global supply of natural rubber for 2010 to 5.2% from the 6.1% rate anticipated in May, according to its June monthly bulletin released recently.

The ANRPC had earlier in March anticipated a 6.3% rate of growth and had even then cautioned it to be an optimistic rate and pointed out a host of constraints in its achievement.

Auto sales in both the U.S. and China continued to rise in June but at a slower pace than the previous month. China’s auto sales surged 30.45% year on year to 7.18 million units in the first half of the year, keeping Chinas position as the world's largest auto market intact. U.S. auto sales also grew in June from the depressed level of year earlier.

Light vehicle sales rose 14% to 983,738 units in June up from last year, Vietnam exported 239,000 tonnes of rubber worth US$656 million in the first half of the year, with earnings 82.5 per cent higher year-on-year, according to the general secretary of the Viet Nam Rubber Association.

Tata Motors and Ashok Leyland have blamed the shortage of tyres in Indian market for increasing imports from China. The average monthly off take by OEMs in fiscal 2008 was 218 thousand tyres, which fell to about 144 thousand in fiscal 2009 due to the global slowdown. The figure recovered to 187 thousand in the last fiscal and for the first two months of the current year, demand has been at 230 thousand tyres a month.

(commodityonline.com)





Rubber may continue trade down on weak technical
Posted: 14 Jul 2010 11:30 PM PDT
INTERNATIONAL
Crude is above the crucial resistance at $76.50 and likely to test $81 in the near term. Weak dollar has helped the natural rubber futures to trade higher on the opening note, but weak technical pulled down the prices towards 267.30.

The ongoing technical correction may extend to few more trading sessions on Tokyo futures markets. It has minor support at 267, 266 and 263.50. Minor recovery can be expected in the later part of the day.

DOMESTIC
On the domestic front the technical correction which has started yesterday may continue. The poor monsoon showers and lower enquiries from end users can dampen the sentiments. The August contract has support at 179.25 and 178.10.

Movements below 177.60 can cause further down trend and it can bring down the prices towards 176.14. Resistance for the August contract can be seen at 179.98 and 181.20. If it can open lower then one can expect side ways movement till noon. Value buying is expected at lower levels.

Analysis of Tokyo rubber market as on July 13
The market lost grounds three days in a row to finish at 260.1 yen with a loss of 5.4 yen as losses in the other commodities and plunging Shanghai rubber market spurred selling below 260 yen in the end.

Selling pressure from the last trading continued during the night session on lower other commodity prices and the day session opened at unchanged level, after which it slowly declined on falling oil prices.

When the Shanghai rubber market showed a drop after the opening, selling pressure gathered momentum and Tokyo market fell down to around 260 yen by loss cut selling. Although it hovered at around 261.0 yen on a quite tone for a while, falling Shanghai market subdued it just before the closing as low as 259.6 yen, the lowest price since December contract debuted.

The Shanghai rubber market plummeted by technical selling as RSI is showing “Dead Cross” as well as losses in stock and copper market, finishing down 820 yuan at 20,985 yuan.

Falling as low as 259.6 yen to break below 260.3 yen, the low price marked on 2nd of July, it can be said that the market is turning into lower side now. Gains in early July were reversed as a result but until it breaks below 250.9 yen, the lower side of the range, contrarian position is recommended.

(commodityonline.com)