Spot rubber prices weaken

Spot rubber prices weaken


Kottayam, Sept 21

Spot rubber weakened on Tuesday. According to observers, the market was in a holiday mood owing to Sree Narayana Guru Samadhi day, while it lost the charm since the reports from the domestic futures were not so promising though the National Multi Commodity Exchange (NMCE) contracts gained marginally during closing hours. The trend was partially mixed as ISNR 20 improved on better demand.

Among other news, there were reports that the domestic prices are likely to ease this week on improvement in supplies from imports. Sheet rubber slipped to Rs 165 from Rs 165.5 a kg amidst scattered transactions. The grade was quoted weak at Rs 165.5 from Rs 166.5 a kg on the Board's Web site.

Futures gain

In futures, the October series improved marginally to Rs 165.97 (165.21), November to Rs 166 (165.43), December to Rs 168.23 (167.6) and January to Rs 170 (169.53) a kg for RSS 4 on the NMCE. The September futures for RSS 3 increased to ¥288 (Rs 153.77) from ¥286 during the day session and then to ¥294 (Rs 156.98) a kg during the night session on Tokyo Commodity Exchange. RSS 3 (spot) closed at Rs 160 (159.81) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 165 (165.5); RSS-5: 161.5 (162); ungraded: 158 (159); ISNR 20: 157 (156) and latex 60 per cent: 114 (115).



Global rubber shortage at record high: Prices eyed


NEW YORK/MUMBAI (Commodity Online): Tyre makers are feeling the heat of severe shortage of rubber, a key ingredient for the tyre industry. The shortage has led to the exorbitant rise in the input costs of the companies.

The plant crop is all set to witness one of the most critical rubber shortages since 2007. Tyre producers world over, including Bridgestone Corp and Goodyear Tire & Rubber Co are shifting the pain to the customers as the companies have revised the prices upwards in a very narrow interval during a year. The tyre industry consumes 60% of the global rubber output.

Further, looking into the production scenario, the output for the next season is seen dismal on the back of aging trees causing reduced yields and slackened output. This would further put pressure on the supply side.

The Association of Natural Rubber Producing Countries also sees less improvement in the coming season 2011. Further, the price escalation is believed to continue as two top rubber growing countries Thailand and Indonesia witnessed sustained rains disrupting rubber output.

Industry analysts peg a 3.9% dip in rubber production during third and fourth quarters, compared with the same period last year. Thailand’s output has fallen by 23% in July because of extended wintering, which takes place during February to April and rains.

Although, Industry estimates suggest that Thailand’s output will remain at around 3.28 million metric tonnes this year, up from 3.16 million tons last year. Meanwhile, Indonesia will have a 2.59 million tonnes of rubber output against 2.44 million tonnes.

On the demand side, the world consumption of rubber will continue to soar, especially at a time when emerging economies like India and China pose a potential growth of over 8% annually. Further, considering the pace of consumption of automobiles in the developing world, the tyre shortage is sure to shoot up in days to come.

India, China and Malaysia account for 47% of the global demand of natural rubber. These countries have been a tight situation for the domestic demand and supply of rubber. This will further disrupt the global balance of demand and supplies, pushing up the commodity prices.

According to fresh estimates, the global rubber consumption is seen overtaking supplies by 127,000 metric tonnes, which is the widest mismatch since 2007.

Looking at the price outlook on the commodity bourses, the futures in Singapore may jump 20% by March, leading to a record USD 4.20 a kilogram. The prices have already been on the boil as the Futures had hit a record USD 4.11 a kg in April, while recently the prices have been quoted at USD 3.50.

Conversely, auto sales in the US during August had been one of the worst for the months in 28 years. This indicated that the recovery in the economy is slack, and prompts for negative sentiment among the consumers.

The woes for the rubber industry might not just be over as the global scenario still remains unpredictable. Although some cues from the countries like India and China could fuel prices, while dismal scenario in the US and UK economy would continue to dampen the inflating price situation.



China, India, Malaysia rubber demands dip

MUMBAI (Commodity Online): Demand from China, India and Malaysia which combined to account for 47% of the global natural demand in 2009 slowed between the first quarter and the third quarter this year, According to Association of Natural Rubber Producing Countries.

China's consumption of natural rubber grew 28% in the first quarter compared with the same period last year, then slowed to 18.7% and 4.3%, respectively, in the second and third quarters. China is the world's top consumer and importer of natural rubber. In India, the world's second largest natural rubber consumer, consumption growth slowed from 12% to 1.0% in the first and third quarters, respectively.

Growth in imports also fell in the three countries over the three quarters. In China the General Administration of Customs reported that China's natural rubber imports in August declined 0.2% compared with the same period a year earlier, to 1.14 million tons.

The ANRPC estimates global production of natural rubber will rise 6.3% to 9.5 million tons this year, with average annual growth from 2007 to 2010 at just 0.7%.The ANRPC noted that the age structure of rubber trees is contributing to the supply crunch.

Large-scale replanting will begin in most major producing countries in 2011, which will cut productive area until the replanted trees start yielding rubber. China's 2010 production forecast has been revised downward by 2.9%, to 660,000 metric tons.



Rubber consumption zooms in China, slows in India


According to Association of Natural Rubber Producing Countries the demand from China, India and Malaysia which combined to account for 47% of the global natural demand in 2009 slowed between the first quarter and the third quarter this year.

China's consumption of natural rubber grew 28% in the first quarter compared with the same period last year, then slowed to 18.7% and 4.3%, respectively, in the second and third quarters.

China is the world's top consumer and importer of natural rubber. In India, the world's second largest natural rubber consumer, consumption growth slowed from 12% to 1.0% in the first and third quarters, respectively. Growth in imports also fell in the three countries over the three quarters.

In China the General Administration of Customs reported that China's natural rubber imports 22 September 2010 in August declined 0.2% compared with the same period a year earlier, to 1.14 million tons.

The ANRPC estimates global production of natural rubber will rise 6.3% to 9.5 million tons this year, with average annual growth from 2007 to 2010 at just 0.7%.The ANRPC noted that the age structure of rubber trees is contributing to the supply crunch.

Large-scale replanting will begin in most major producing countries in 2011, which will cut productive area until the replanted trees start yielding rubber.

China's 2010 production forecast has been revised downward by 2.9%, to 660,000 metric tons.

General Administration of Customs reported that China's natural rubber imports in August rose 4.9% from a year earlier to 158,589 metric tons.

The data showed that August natural rubber imports were up 7.2% from July, when 147,902 tons were imported. In the January-August period, natural rubber imports dropped 0.2% compared with the same period a year earlier, to 1.14 million tons.

China is the world's biggest importer of natural rubber and sources most of its supplies from the world's leading natural rubber producers like Thailand, Indonesia and Malaysia.