Spot rubber weakens on buyer resistance

Spot rubber weakens on buyer resistance

Kottayam, July 30

Spot rubber prices turned weak on Friday. The market slipped on buyer resistance though supply concerns continued to haunt the traders amidst sustained monsoon rains. Sheet rubber moved down to Rs 185 from Rs 185.50 a kg, while the trend was mixed as ISNR 20 and latex 60 per cent were flat and rather inactive The Rubber Board's rate was steady at Rs 184 a kg for RSS 4.

Futures gain

In futures, the August series closed at Rs 183.86 (185.22), September at Rs 168.95 (168.75), October at Rs 160.50 (160.49) and November at Rs 160.50 (160.50) a kg for RSS 4 on the National Multi Commodity Exchange. The near month August series hit a high of Rs 185.99 and a low of Rs 182.60 a kg during the session. The total open interest in all series was 5724 lots. RSS 3 improved with August futures rising to ¥303.8/Rs 163.33 (¥300.6) during the day session and to ¥303.9 (Rs 163.38) a kg during the night session on the Tokyo Commodity Exchange. The grade closed at Rs 150.54 (Rs 149.72) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 185 (185.50); RSS-5: 179 (179.50); ungraded: 169.50 (170); ISNR 20: 157 (157) and latex 60 per cent: 110 (110).




Goodyear Q2 beats estimates but 2nd half a worry
Posted: 29 Jul 2010 05:42 PM PDT
(Reuters) - Goodyear Tire & Rubber Co (GT.N) posted better-than-expected quarterly earnings on Thursday and a profit in its key North American unit, but shares slipped on concerns about the second-half outlook.

Goodyear, whose shares were down 4 percent on Thursday after a run-up of more than 20 percent in July, said the economy remained uncertain and raw materials costs were a challenge but had been more than offset in the quarter by the increased pricing and the sale of a higher percentage of more expensive tires.

"The improving global economy, while certain not to be a straight upward path, will provide the environment to fill our factories," Chief Executive Richard Kramer said on a conference call with analysts.

Kramer also said there would be a "significant footprint action" in North America, but Goodyear has not made any final decisions about potential changes.

Goodyear's four-year contract with the United Steelworkers union last year left jobs at its Union City, Tennessee, plant unprotected while providing job security at six other plants. Union City has about 2,000 jobs.

"The market may have been underestimating the materials cost headwinds the company faces in the second half of the year," CRT Capital Group analyst Kirk Ludtke said.

The question really is whether Goodyear will be able to pass the increases in raw materials to customers, Morningstar analyst Joung Park said.

Goodyear, the largest U.S. tire maker, pushed to a profit in North America after a steep loss a year earlier. The turnaround was due to price increases, sale of a higher percentage of more expensive tires and market share gains on branded consumer replacement tires, the company said.

In Latin America, operating income fell in part due to the Venezuelan currency devaluation, Goodyear said. For the year, the currency devaluation, weaker demand and other factors could pressure operating income by $75 million in the unit, it said.

Goodyear reported net income of $28 million, or 11 cents per share, for the second quarter, compared with a net loss of $221 million, or 92 cents per share, a year earlier. Revenue rose 15 percent to $4.5 billion.

Excluding one-time items, Goodyear reported earnings of 12 cents per share. Analysts, on average, had expected it to earn 5 cents per share, according to Thomson Reuters I/B/E/S.

Goodyear sold 10 percent more tires in the quarter than a year earlier. In general, about two-thirds of Goodyear's tire sales are to the replacement market and one-third to automotive manufacturers for new vehicles, generating lower margins.

In the North American unit, tire sales to manufacturers rose 69 percent in the quarter from the year-earlier period, when the manufacturing shutdowns at General Motors Co GM.UL and Chrysler Group LLC during their government-supported bankruptcies had cut demand.

Shipments of replacement tires in North America rose 2 percent in the quarter from a year earlier.

Goodyear expects raw materials costs in the second half of the year to be less than previously forecast. It expects them to peak in the third quarter, with an increase of 30 percent to 35 percent from a year earlier. It expects fourth quarter raw materials costs to be up about 30 percent from a year earlier.

Goodyear shares were down 52 cents, or 4.4 percent, at $11.43 Thursday afternoon on the New York Stock Exchange.

(reuters.com)





Kerala expects good spice yield
Posted: 29 Jul 2010 05:40 PM PDT
The moderate monsoon in Kerala has been good for most crops and adequate rains has provided the perfect platform for the agriculture sector. According to analysts, this would be a good season for both edible and cash crops.

The progress of the monsoon has enthused natural rubber growers and production is in full swing. Rubber Board sources said production would be up by around 6-7 per cent and the existing high prices will encourage growers to invest in plantations.

Production increased 5 per cent in June to 57,000 tonnes against 54,255 tones in June, 09, according to the latest data.

N Radhakrishnan, former president of Cochin Rubber Merchants Association said production will increase, as tapping is in full swing in major rubber cultivating areas. But the slow pace in re-planting of old trees are serious concerns.

KM Michel, president, Cardamom Growers Association said the rainfall pattern in high ranges is good and spices, especially cardamom and pepper, are expected to have a good yield.

According to his estimates there might be 5-10 per cent increase in production. During the last season, around 10,000 tonnes of cardamom was produced. The high average price (Rs 1500 per kg) has also pushed up nursing of plantations in Idukki district, where nearly 70 per cent of cardamom is produced.

Agriculture officer Benny Kuriakose said the sharp increase in prices of black pepper and a moderate monsoon is also encouraging growers. The total production last season was between 45,000-50,000 tonnes. The harvesting season will begin in December.

Coco is expected to have a good crop. Growers said the monsoon was also favourable for growing nutmeg. An official of the Coconut Development Board told Business Standard that production is likely to increase.

R Anilkumar, a banana planter of Thrissur district said there was minimal damage due to lack of strong winds and a good crop is expected during Onam in August.

After 45 days of ban on trawlers, the fishing sector will be active from 1st August and good seasonal catch is expected. Around 5,000 fishing boats are preparing for a good season.

(business-standard.com)