Spot rubber slips on lack of demand
Kottayam, Nov. 30
Spot rubber prices declined further on Tuesday. The market shed gains due to continuous weakness in domestic futures and the favourable change for production in weather conditions. Prices slipped mainly on selling from dealers while there was no fresh demand from the tyre sector, an observer said. The trend was mixed as ISNR–20 finished flat amidst scattered transactions.
Sheet rubber declined Rs 195.50 (Rs 198) a kg, according to dealers. The grade surrendered to Rs 196 (198.50) on the Board's Web site.
RSS 4 weakened with the December series slipping to Rs 193.74 (Rs 195.96), January to Rs 196.80 (Rs 199.02), February to Rs. 199.98 (Rs 202.03) and March to Rs 202.50 (Rs 204.98) a kg on the National Multi Commodity Exchange.
December futures improved to ¥ 359.1 (Rs.196.78) from ¥ 356.5 during the day session but then slipped to ¥ 357.5 (Rs. 195.92) a kg for RSS 3 in the night session on the Tokyo Commodity Exchange. RSS 3 (spot) moved down to Rs. 199.44 (200.02) a kg at Bangkok.
Spot rubber rates (Rs a kg) were: RSS-4 –195.50 (198.00); RSS-5 –184.50 (186.50); ungraded –179.50 (181); ISNR 20 –191 (191); and latex 60% 128 (129).
TOCOM Rubber declines on weak crude oil
Posted: 29 Nov 2010 04:15 AM PST
International Market
Tokyo rubber may remain sideways, due to weak Yen and strong crude oil. The April futures have immediate resistance at 357.40 and 359.10. If it can break 360 mark with volumes then it may even move up towards 365.90. Support at 355.40 and 354.70. Chinese move to increase margins and daily price limit can cause huge bull liquidation and volatility back into the market.
Domestic Market
In the domestic market natural rubber December have support at 199.11 and 198.81. If it trades below more selling is expected. Heavy showers and landslides will support the natural rubber prices to a certain extent; because of this arrivals are very little. Resistance for the natural rubber will be at 200.61 and 201.50. Expect a sideways trend rather than a firm trend.
Analysis of Tokyo Rubber Market
The market fell sharply to the low of 351.7 yen and closed the session at 355.2 yen, loosing 7.5 yen, on a continuous loss in Shanghai rubber market for three days in a row. Following the night session, finished lower by 3.4 yen at 359.3 yen due to weakened oil prices and Shanghai rubber market yesterday after TOCOM closed, the day session resumed trading slightly higher at 359.8 yen on rebounded oil prices and bullish other commodity markets, and it gradually rose as high as 362.8 yen after opening in order to fill the gap with previous day session close.
But it lost ground to the low, at that time, of 355.1 yen as Shanghai rubber market plunged below 31,000 yuan and reached to limit down, 30,375 yuan, and the price ranged around 356 yen level afterward. Furthermore, due to declined oil prices and weaker Shanghai rubber market,stayed at limit down in the afternoon session, the price fell even more to trigger Circuit Breaker and enewed the day’s low at 351.7 yen. Massive selling did not last long and the market rebounded toward closing.
The Shanghai rubber market moved downwardly from opening and mostly stayed at limit down throughout the session, finally closed at 30,375 yuan with a loss of 1,600 yuan. Since the spread between TOCOM and SHFE narrowed quickly in these 2 weeks, selling pressure could be strengthened by arbitragers, thus, selling momentum could last little more while.
The market showed backwardation with a spread of about 1.7 yen in two forward contracts, meaning that rolling over by short position holders remained active compared to the activity by long position holders. It would be changing to contango market as funds start to roll their long position.
Rubber News
Rubber slumped as China, the largest user, will raise commodity futures margins to cool prices and as growers in Indonesia, the second-biggest exporter, boost output to benefit from record prices. May-delivery rubber on the Tokyo Commodity Exchange fell as much as 3 percent to 351.7 yen per kilogram ($4,191 a metric ton) before settling at 355.2 yen. The most-active contract, which reached a 30-year high of 383 yen on Nov. 11, is set for the worst weekly loss since July 2.
Futures in Shanghai tumbled by the daily limit to the lowest level since Oct. 13. Tokyo opened today with negative trend. Today though all contracts opened above the previous day’s close, soon the prices declined to as low as 352.8 yen. January and February contracts are trading with the highest loss for the day of 2.1 yen.
Most active May deliveries rose up to 357.2 yen and are currently trading at 354.4 yen making minor loss of 0.8 yen. Shanghai was closed on 26th with negative trend, all contracts making losses. Today also the March deliveries are trading with losses. The rubber stock with Shanghai Futures Exchange dropped by 90 tons and the current holding is 48265 tons.
In Thai market RSS 3 rubber futures June and July are trading with losses 1.10 baht per kg. There are no quotes for the contract at 9.28 IST.
AUTO SECTOR NEWS
Saab will sell about 25,000 vehicles this year as “sales are slumping,”Focus magazine reported, without saying where it got the information. Hyundai Motor Co. raised its China sales forecast for this year to 690,000 vehicles, from 670,000, and said the company’s third plant in the nation will make compact cars once production starts in the second half of 2012.
Crude Oil News
Oil rose in New York after European governments extended an 85 billion-euro ($113 billion) lifeline to debt-strapped Ireland and as a pickup in purchases by U.S. shoppers prompted optimism about fuel demand. The price of options to buy December 2011 futures at $100 a barrel jumped 14 percent on Nov. 24, the largest one-day gain in three months, according to data compiled by Bloomberg.
The January contract climbed as much as 39 cents, or 0.5 percent, to $84.15 a barrel, in electronic trading on the New York Mercantile Exchange, and was at $84.04 at 10:18 a.m. Sydney time. Brent crude for January settlement added 27 cents, or 0.3 percent, to $85.85 a barrel, on the Londonbased ICE Futures Europe exchange. So-called open interest for the contract has risen 51 percent this year to 45,424 lots, the highest for any crude option on the New York Mercantile Exchange.
Weather Report
In Malaysia at Kuala Lumpur thunderstorms and scattered rain are expected. Temperature may go up to 32 °C during day time. 60 per cent chance of precipitation is expected during the day time and night time. Temperature is expected to be at 23 °C at the low level.
According to the Jakarta Observatory, thunder storms and scattered clouds is expected. Day temperature may go up to 32 °C. There is 60 per cent chance for precipitation and temperature at low level will be 26 °C.
In Thailand, the climate is expected to be partly cloudy with 0-10 per cent chance of precipitation. Temperature may go up to 33°C during day time. Temperature is expected to be at 24 °C at the low level.
In Beijing, China, 0 percent chance of precipitation is expected. The climate is expected to be sunny and clear with wind. Temperature may go up to 6°C during day time. Temperature is expected to be at - 05°C at the low level.
In Singapore, thunderstorms and scattered clouds are expected with 60 per cent chance of precipitation. Temperature may go up to 31 °C during day time. Temperature is expected to be at 24 °C at the low level.
In Thiruvananthapuram, thunderstorms and scattered rain are expected with 60 percent chance of precipitation. Temperature may go up to 28 °C during day time. Temperature is expected to be at 24 °C at the low level. In Kottayam, scattered rain with thunderstorms is expected with 60 per cent chance of precipitation. Temperature may go up to 28 °C during day time. Temperature is expected to be at 23 °C at the low level.
(Source: http://www.commodityonline.com/futures-trading/technical/TOCOM-Rubber-declines-on-weak-crude-oil-20174.html)
M'sian rubber market seen to be steady this week
Posted: 29 Nov 2010 04:14 AM PST
KUALA LUMPUR: Trading on the Malaysian rubber market is expected to be steady this week, amid a weak stock situation in the key producer countries of Indonesia, Thailand and Malaysia, a dealer said.
Prices are rising because of a demand-supply gap. The incessant rains in some parts of Malaysia has hit supply and this is expected to last until January, the dealer added.
The south of Malaysia have been badly affected by flooding caused by rains throughout the months of October and November, and has somewhat disrupted tapping and lowered production.
The SMR 20 breached its highest level of 1,351.0 sen per kg on Nov 11.
On a weekly basis, the Malaysian Rubber Board's official physical price for tyre-grade SMR 20 on Friday ended 10 sen lower at 1,319.5 sen per kg compared to previous Friday's closing of 1,329.5 sen, while latex-in-bulk rose 7.5 sen to 882.0 sen per kg.
The unoffical sellers' closing price for tyre-grade SMR 20 dropped 24.5 sen per kg to 1,313.0 sen per kg while latex in bulk went up 2.0 sen to 880.0 sen per kg. Bernama.
(Source: http://biz.thestar.com.my/news/story.asp?file=/2010/11/29/business/7515629&sec=business)
Spot rubber weakens on buyer resistance
Kottayam, Nov. 29
Spot rubber prices turned weak on Monday. Declines in domestic futures and a favourable change in weather for tapping as rains subsided were the key factors that influenced the sentiments in the market. There was no visible selling pressure in the market as arrivals continued to be low.
According to dealers, sheet rubber moved down to Rs 198 (199.50) a kg on buyer resistance. The grade slipped to Rs 198.50 (199.50) a kg both at Kottayam and Kochi, according to the Rubber Board.
Futures decline
In futures, the December series declined to Rs 195.94 (199.74), January to Rs 199 (202.80), February to Rs 202.02 (205.47) and March to Rs 204.84 (208.40) a kg for RSS 4 on the National Multi Commodity Exchange.
RSS 3 improved with the December futures rising to o ¥356.5 (Rs 194.48) from ¥354 during the day session and then to ¥358 (Rs 195.35) a kg in the night session on the Tokyo Commodity Exchange. The grade (spot) closed at Rs 200.02 (200.14) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 198 (199.50); RSS-5: 186.50 (187.50); ungraded: 181 (183.50); ISNR 20: 191 (192.50) and latex 60 per cent: 129 (130).
Tuesday, November 30, 2010
Monday, November 29, 2010
Spot rubber stays steady
Spot rubber stays steady
Kottayam, Nov. 26
Spot rubber continued to finish unchanged on Friday. An almost similar trend on NMCE and declines in the Japanese markets kept the sentiments almost neutral, an observer said. Sheet rubber finished flat at Rs 199.50 both at Kottayam and Kochi according to dealers and Rubber Board. The volumes were extremely narrow.
“Assuming normal weather conditions, we are estimating a rise in production in 2011,” said Mr. Jom Jacob, Senior Economist, ANRPC. “ Demand from tyre makers is rising in every country. But in the short term, we have to see what measures China is taking to curb inflation,” he added. “Weather surprised every one in the last two months and still it is not favourable for tapping. The phenomenon is unlikely to allow prices to drop from current levels,” said Mr. George Valy, President, Indian Rubber Dealers Federation.
Futures firm
In futures, the December series closed at Rs 200.55 (200.38), January at Rs 203.65 (203.33), February at Rs 205.50 (205.82) and March at Rs 208.50 (209.03) a kg for RSS 4 on National Multi Commodity Exchange (NMCE).
The volumes totalled 5796 lots and the turnover at Rs 117.67 crores. The total open interest in all series was 6301 lots.
RSS 3 weakened at its December futures to ¥354 (Rs 193.57) from ¥356.3 during the day session but then to ¥350 (Rs 191.35) a kg in the night session on the Tokyo Commodity Exchange (TOCOM). The grade (spot) slipped to Rs 200.14 (200.15) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 199.50 (199.50); RSS-5: 187.50 (187.50); ungraded: 183.50 (183.50); ISNR 20: 192.50 (192.50) and latex 60 per cent: 130 (130).
Kottayam, Nov. 26
Spot rubber continued to finish unchanged on Friday. An almost similar trend on NMCE and declines in the Japanese markets kept the sentiments almost neutral, an observer said. Sheet rubber finished flat at Rs 199.50 both at Kottayam and Kochi according to dealers and Rubber Board. The volumes were extremely narrow.
“Assuming normal weather conditions, we are estimating a rise in production in 2011,” said Mr. Jom Jacob, Senior Economist, ANRPC. “ Demand from tyre makers is rising in every country. But in the short term, we have to see what measures China is taking to curb inflation,” he added. “Weather surprised every one in the last two months and still it is not favourable for tapping. The phenomenon is unlikely to allow prices to drop from current levels,” said Mr. George Valy, President, Indian Rubber Dealers Federation.
Futures firm
In futures, the December series closed at Rs 200.55 (200.38), January at Rs 203.65 (203.33), February at Rs 205.50 (205.82) and March at Rs 208.50 (209.03) a kg for RSS 4 on National Multi Commodity Exchange (NMCE).
The volumes totalled 5796 lots and the turnover at Rs 117.67 crores. The total open interest in all series was 6301 lots.
RSS 3 weakened at its December futures to ¥354 (Rs 193.57) from ¥356.3 during the day session but then to ¥350 (Rs 191.35) a kg in the night session on the Tokyo Commodity Exchange (TOCOM). The grade (spot) slipped to Rs 200.14 (200.15) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 199.50 (199.50); RSS-5: 187.50 (187.50); ungraded: 183.50 (183.50); ISNR 20: 192.50 (192.50) and latex 60 per cent: 130 (130).
Saturday, November 27, 2010
Spot rubber stays steady
Spot rubber stays steady
Kottayam, Nov. 26
Spot rubber continued to finish unchanged on Friday. An almost similar trend on NMCE and declines in the Japanese markets kept the sentiments almost neutral, an observer said. Sheet rubber finished flat at Rs 199.50 both at Kottayam and Kochi according to dealers and Rubber Board. The volumes were extremely narrow.
“Assuming normal weather conditions, we are estimating a rise in production in 2011,” said Mr. Jom Jacob, Senior Economist, ANRPC. “ Demand from tyre makers is rising in every country. But in the short term, we have to see what measures China is taking to curb inflation,” he added. “Weather surprised every one in the last two months and still it is not favourable for tapping. The phenomenon is unlikely to allow prices to drop from current levels,” said Mr. George Valy, President, Indian Rubber Dealers Federation.
Futures firm
In futures, the December series closed at Rs 200.55 (200.38), January at Rs 203.65 (203.33), February at Rs 205.50 (205.82) and March at Rs 208.50 (209.03) a kg for RSS 4 on National Multi Commodity Exchange (NMCE).
The volumes totalled 5796 lots and the turnover at Rs 117.67 crores. The total open interest in all series was 6301 lots.
RSS 3 weakened at its December futures to ¥354 (Rs 193.57) from ¥356.3 during the day session but then to ¥350 (Rs 191.35) a kg in the night session on the Tokyo Commodity Exchange (TOCOM). The grade (spot) slipped to Rs 200.14 (200.15) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 199.50 (199.50); RSS-5: 187.50 (187.50); ungraded: 183.50 (183.50); ISNR 20: 192.50 (192.50) and latex 60 per cent: 130 (130).
Tokyo rubber futures fall three percent
Posted: 25 Nov 2010 03:22 PM PST
Tokyo (november 25, 2010) : key tokyo rubber futures fell more than 3 percent on wednesday as global financial markets were rattled by heightened tensions in the korean pennisula following a north korean artillery attack on a south korean island near the border. the key tokyo commodity exchange rubber contract for april delivery settled at 359.5 yen per kg, down 10.3 yen or 2.8 percent. it fell as low as 356.4 yen, the lowest since november 18.
the april benchmark contract had climbed as high as 375.9 yen on friday, the highest since november 12. the benchmark contract will switch to may from thursday. deliveries against the november futures contract fell 25 percent from last month to 214 lots or 1,070 tonnes. the nearby november contract expired at 354.9 yen per kg. the most active rubber contract for may delivery on the shanghai futures market closed at 32,285 yuan ($4,859) per tonnes.
(Source: http://www.brecorder.com/news/agriculture-and-allied/world/1127488:tokyo-rubber-futures-fall-three-percent.html?hl=rubber)
Natural Rubber Supply May Beat Forecast on Indonesia, Producer Group Says
Posted: 25 Nov 2010 03:20 PM PST
Natural rubber supply this year may be more than forecast last month as growers in Indonesia boost output to benefit from record prices, a producers’ group said.
Production may increase 6.6 percent to 9.5 million metric tons, more than the 9.4 million tons forecast on Oct. 27, the Association of Natural Rubber Producing Countries said in an e- mailed statement today. Supply may drop 3.8 percent in the three months to Dec. 31 as rain disrupts tapping in Thailand, the biggest producer and exporter, the group said.
Rubber in Tokyo has climbed 30 percent this year as rain in Thailand, Indonesia and Malaysia, the top three growers, interrupted tapping and lowered production. Futures on the Tokyo Commodity Exchange reached a 30-year high of 383 yen on Nov. 11.
Total supply would be more than earlier predicted because Indonesia’s estimates for the third and fourth quarter have “undergone major revisions to the higher side” against a downward adjustment for Thailand and Malaysia, Jom Jacob, the group’s senior economist, said in the statement.
Thailand’s rubber supply this year may drop 1.4 percent to 3.12 million tons and rebound 4.1 percent to 3.25 million tons next year, the group said. Indonesia’s output may jump 16.9 percent to 2.85 million tons this year and climb further to 2.94 million tons in 2011, it said.
The price boom appears “to have prompted the dominant smallholders in Indonesia to exploit the maximum possible yield from their trees,” Jacob said. Indonesia’s production gained 33.1 percent in the three months to Sept. 30 and may increase 18.6 percent in the October to December period, he said.
China Drop
China’s consumption of natural rubber, including compound rubber, may drop 2 percent in the fourth quarter as the government takes steps to cool commodity prices, the group said. Imports of all forms of natural rubber may climb 7.1 percent to 3.26 million tons this year and increase by 6 percent to 3.45 million tons in 2011, the group said.
“Natural rubber markets do not appear to have received any notable support from the demand side,” Jacob said. “Concerns over China’s new policy measures clouded demand expectations.”
April-delivery rubber on the Tokyo Commodity Exchange gained as much as 2.6 percent to 368.7 yen per kilogram ($4,419 a ton) before settling at 362.6 yen today.
Chinese Premier Wen Jiabao’s government has raised interest rates, increased the reserve requirement for banks and pledged to use price controls if needed as part of efforts to rein in inflation that reached 4.4 percent last month. Analysts at nine banks surveyed by Bloomberg News last week predicted the PBOC will boost borrowing costs a second time by the end of the year.
China’s recent moves to crack down on speculation in commodities have worked, and prices of goods from cotton to copper have all declined, the National Development and Reform Commission said in a statement on its website today.
(Source: http://www.bloomberg.com/news/2010-11-25/natural-rubber-supply-may-beat-forecast-on-indonesia-producer-group-says.html)
Rubber Futures Advance as U.S. Data Raise Demand Outlook, Supply Limited
Posted: 25 Nov 2010 03:18 PM PST
Rubber increased as improvement in U.S. employment and consumer sentiment boosted speculation that demand will expand for the commodity used in tires, and as supply is limited from Thailand, the largest exporter.
April-delivery rubber on the Tokyo Commodity Exchange gained as much as 2.6 percent to 368.7 yen per kilogram ($4,419 a metric ton) before settling at 362.6 yen. The price reached a 30-year high of 383 yen on Nov. 11.
Asian stocks advanced after data showed U.S. jobless claims dropped to the lowest level since 2008, bolstering optimism that economic growth will accelerate. Rubber supply from Thailand and other Asian producers remains tight after rain and flooding disrupted plantation work, saidKazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co. in Tokyo.
“The market drew support from good economic data from the U.S.,” Saito said by phone today. “Fundamentals remain positive as supply is curbed by weather problems.”
The cash price of natural rubber in Thailand gained 0.2 percent to 131.55 baht ($4.38) per kilogram today, boosted by strong demand amid a supply shortage, according to the Rubber Research Institute of Thailand. The price reached a record 132.75 baht per kilogram on Nov. 23.
The U.S. Labor Department said jobless claims fell to 407,000 last week. The median projection of economists surveyed by Bloomberg News called for a drop to 435,000. The Thomson Reuters/University of Michigan final index of November consumer sentiment increased to 71.6, the highest level since June and exceeding the median economist estimate of 69.5.
Shanghai Futures
May-delivery rubber in Shanghai lost 1.8 percent to 31,690 yuan ($4,765) a ton at 2:42 p.m. local time. The price retreated from a record 38,920 yuan on Nov. 11 on concern that China, the largest consumer, may take additional steps to curb inflation and slow its economic growth, Saito said.
China’s central bank said it will strengthen liquidity management and “normalize” monetary conditions after having twice this month ordered banks to hold more in reserves to curb inflation that’s at a two-year high.
The nation will use quantitative and price tools to manage liquidity, Hu Xiaolian, a deputy governor of the People’s Bank of China, said in a statement posted to the central bank’s website yesterday. China will also control the pace of bank lending for the remainder of this year as it will be difficult to stay within the government’s 7.5 trillion yuan ($1.13 trillion) target for new loans in 2010, she said.
Premier Wen Jiabao’s government has raised interest rates, increased the reserve requirement for banks and pledged to use price controls if needed as part of efforts to rein in inflation that reached 4.4 percent last month. Analysts at nine banks surveyed by Bloomberg News last week predicted the PBOC will boost borrowing costs a second time by the end of the year.
China’s recent moves to crack down on speculation in commodities have worked, and prices of goods from cotton to copper have all declined, the National Development and Reform Commission said in a statement on its website today.
(Source: http://www.bloomberg.com/news/2010-11-25/rubber-futures-advance-as-u-s-data-raise-demand-outlook-supply-limited.html)
Rubber exporters worried
Posted: 25 Nov 2010 03:13 PM PST
Thailand's rubber exporters are concerned Chinese policies to control inflation will impose import quotas.
China is among the world's largest natural rubber importers and is Thailand's biggest buyer, purchasing 1.16 million tonnes from the kingdom of the 2.46 million total it imported in 2009.
Luckchai Kittipol, president of the Thai Rubber Association, said exporters are concerned about import restrictions.
China's continued robust economy, especially in the automobile industries, has driven demand for rubber the past few years. Demand for rubber was 7.74 million tonnes last year _ 3.47 million tonnes of para rubber and 4.27 million of synthetic rubber.
This year, rubber demand is forecast to reach 8.11 million tonnes, comprising 3.44 million of natural rubber and 4.67 million tonnes of synthetic rubber.
China's capacity in tyre manufacturing totals 654.6 million units while it exports tyres at a rate of 123.22 million radial units.
China expects to buy over 30% of Thailand's 2.85 million tonnes of rubber exports this year.
Mr Luckchai is still optimistic this year's rubber exports will meet the association's target of 200 billion baht in income.
In the first nine months of this year, the country shipped two million tonnes of rubber products worth 170 billion baht.
The association is attending the 10th International Exhibition on Rubber Technology to be held today through Saturday at the Exhibition Centre in Shanghai to explore trade opportunities and showcase technologies and innovation in rubber products from Thailand.
(Source: http://www.bangkokpost.com/business/economics/208032/rubber-exporters-worried)
Tyre makers hit by surging rubber prices
Posted: 25 Nov 2010 03:12 PM PST
Results for the September quarter were a non-event for tyre companies. While these companies were putting together the financials for the period, natural rubber price in the country (RSS-4 grade) shot up sharply beyond the quarter’s average price of around Rs.165 a kg. By mid-October, it jumped toRs.190 per kg and climbed further to the present level of around Rs.202 per kg. This is around 22% higher than last quarter’s average price. The fact that rubber costs account for almost half of the total cost of producing a tyre means that profit margins of these firms will be squeezed.
The surge in prices is not a recent short-term aberration either. Rubber prices have risen by as much as 150% in the past two years, from levels ofRs.76/kg in November 2008.
International prices, too, have shot up in a similar fashion, giving no opportunity for companies to import at lower costs. Reports suggest that the price in Thailand—the world’s largest rubber producing nation—at around $4.3 (Rs.196) a kg, has not only tripled since early 2009, but also surpassed the peak of 1952, when fears of Korean war triggered panic buying.
Prices are rising because of a demand-supply gap. Officials at the Rubber Board of India say that incessant rains hit supply this season. While the cultivation acreage is increasing, it would not be before 2012-13 that the new plantations would add to production. According to estimates by the Rubber Board, India’s rubber production is expected to increase by 9% to 890,000 tonnes in 2010. But demand, supported by the auto boom and high consumerism, would be higher at around 970,000 tonnes, according to industry experts. This gap in supply is expected to keep prices buoyant.
Globally, too, rains played havoc, resulting in lower production in three of the world’s largest rubber producing nations—Thailand, Indonesia and Malaysia. And this comes at a time when rubber inventories are at the year’s low in China.
Like global tyre firms, Indian companies have taken price increases to offset the impact of higher rubber prices. Leading tyre makers such as Apollo Tyres Ltd, MRF Ltd, Ceat Ltd and JK Tyre and Industries Ltd have increased tyre prices by 12-15% in the last one year.
Yet, as the chart indicates, all tyre makers have seen profitability steadily declining in the last four quarters. And this also despite increasing volumes, thanks to the boom in the auto sector. The reason is that raw material cost increases continue to surpass the hike in tyre prices. Apollo’s operating margin fell to 10.3% last quarter, down from 16.4% a year ago, while MRF’s margins fell by 690 basis points to 9.8%. Smaller firms were worse off; Ceat and JK Tyres reported wafer-thin margins of 4% and 6.2%, respectively.
Surjit Arora, an analyst at Prabhudas Lilladher Pvt. Ltd, says that tyre firms may see no respite in profit margins in the next two quarters, unless rubber prices soften. They would have to increase tyre prices by at least 3-6% to sustain the present profit margins.
Shares of all tyre makers have reacted adversely since the first quarter of fiscal 2011, due to fall in profitability and the grim outlook in the near term. Barring MRF, where strong management and low-liquidity support the share price and which rose 16% amidst these adversities, shares of Apollo, Ceat and JK fell by 6%, 10% and 27% from 1 April till date. But strong volumes and revenue momentum could turn the fortunes sharply if the key raw material gives respite.
(Source: http://www.livemint.com/2010/11/25212044/Tyre-makers-hit-by-surging-rub.html?atype=tp)
Kottayam, Nov. 26
Spot rubber continued to finish unchanged on Friday. An almost similar trend on NMCE and declines in the Japanese markets kept the sentiments almost neutral, an observer said. Sheet rubber finished flat at Rs 199.50 both at Kottayam and Kochi according to dealers and Rubber Board. The volumes were extremely narrow.
“Assuming normal weather conditions, we are estimating a rise in production in 2011,” said Mr. Jom Jacob, Senior Economist, ANRPC. “ Demand from tyre makers is rising in every country. But in the short term, we have to see what measures China is taking to curb inflation,” he added. “Weather surprised every one in the last two months and still it is not favourable for tapping. The phenomenon is unlikely to allow prices to drop from current levels,” said Mr. George Valy, President, Indian Rubber Dealers Federation.
Futures firm
In futures, the December series closed at Rs 200.55 (200.38), January at Rs 203.65 (203.33), February at Rs 205.50 (205.82) and March at Rs 208.50 (209.03) a kg for RSS 4 on National Multi Commodity Exchange (NMCE).
The volumes totalled 5796 lots and the turnover at Rs 117.67 crores. The total open interest in all series was 6301 lots.
RSS 3 weakened at its December futures to ¥354 (Rs 193.57) from ¥356.3 during the day session but then to ¥350 (Rs 191.35) a kg in the night session on the Tokyo Commodity Exchange (TOCOM). The grade (spot) slipped to Rs 200.14 (200.15) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 199.50 (199.50); RSS-5: 187.50 (187.50); ungraded: 183.50 (183.50); ISNR 20: 192.50 (192.50) and latex 60 per cent: 130 (130).
Tokyo rubber futures fall three percent
Posted: 25 Nov 2010 03:22 PM PST
Tokyo (november 25, 2010) : key tokyo rubber futures fell more than 3 percent on wednesday as global financial markets were rattled by heightened tensions in the korean pennisula following a north korean artillery attack on a south korean island near the border. the key tokyo commodity exchange rubber contract for april delivery settled at 359.5 yen per kg, down 10.3 yen or 2.8 percent. it fell as low as 356.4 yen, the lowest since november 18.
the april benchmark contract had climbed as high as 375.9 yen on friday, the highest since november 12. the benchmark contract will switch to may from thursday. deliveries against the november futures contract fell 25 percent from last month to 214 lots or 1,070 tonnes. the nearby november contract expired at 354.9 yen per kg. the most active rubber contract for may delivery on the shanghai futures market closed at 32,285 yuan ($4,859) per tonnes.
(Source: http://www.brecorder.com/news/agriculture-and-allied/world/1127488:tokyo-rubber-futures-fall-three-percent.html?hl=rubber)
Natural Rubber Supply May Beat Forecast on Indonesia, Producer Group Says
Posted: 25 Nov 2010 03:20 PM PST
Natural rubber supply this year may be more than forecast last month as growers in Indonesia boost output to benefit from record prices, a producers’ group said.
Production may increase 6.6 percent to 9.5 million metric tons, more than the 9.4 million tons forecast on Oct. 27, the Association of Natural Rubber Producing Countries said in an e- mailed statement today. Supply may drop 3.8 percent in the three months to Dec. 31 as rain disrupts tapping in Thailand, the biggest producer and exporter, the group said.
Rubber in Tokyo has climbed 30 percent this year as rain in Thailand, Indonesia and Malaysia, the top three growers, interrupted tapping and lowered production. Futures on the Tokyo Commodity Exchange reached a 30-year high of 383 yen on Nov. 11.
Total supply would be more than earlier predicted because Indonesia’s estimates for the third and fourth quarter have “undergone major revisions to the higher side” against a downward adjustment for Thailand and Malaysia, Jom Jacob, the group’s senior economist, said in the statement.
Thailand’s rubber supply this year may drop 1.4 percent to 3.12 million tons and rebound 4.1 percent to 3.25 million tons next year, the group said. Indonesia’s output may jump 16.9 percent to 2.85 million tons this year and climb further to 2.94 million tons in 2011, it said.
The price boom appears “to have prompted the dominant smallholders in Indonesia to exploit the maximum possible yield from their trees,” Jacob said. Indonesia’s production gained 33.1 percent in the three months to Sept. 30 and may increase 18.6 percent in the October to December period, he said.
China Drop
China’s consumption of natural rubber, including compound rubber, may drop 2 percent in the fourth quarter as the government takes steps to cool commodity prices, the group said. Imports of all forms of natural rubber may climb 7.1 percent to 3.26 million tons this year and increase by 6 percent to 3.45 million tons in 2011, the group said.
“Natural rubber markets do not appear to have received any notable support from the demand side,” Jacob said. “Concerns over China’s new policy measures clouded demand expectations.”
April-delivery rubber on the Tokyo Commodity Exchange gained as much as 2.6 percent to 368.7 yen per kilogram ($4,419 a ton) before settling at 362.6 yen today.
Chinese Premier Wen Jiabao’s government has raised interest rates, increased the reserve requirement for banks and pledged to use price controls if needed as part of efforts to rein in inflation that reached 4.4 percent last month. Analysts at nine banks surveyed by Bloomberg News last week predicted the PBOC will boost borrowing costs a second time by the end of the year.
China’s recent moves to crack down on speculation in commodities have worked, and prices of goods from cotton to copper have all declined, the National Development and Reform Commission said in a statement on its website today.
(Source: http://www.bloomberg.com/news/2010-11-25/natural-rubber-supply-may-beat-forecast-on-indonesia-producer-group-says.html)
Rubber Futures Advance as U.S. Data Raise Demand Outlook, Supply Limited
Posted: 25 Nov 2010 03:18 PM PST
Rubber increased as improvement in U.S. employment and consumer sentiment boosted speculation that demand will expand for the commodity used in tires, and as supply is limited from Thailand, the largest exporter.
April-delivery rubber on the Tokyo Commodity Exchange gained as much as 2.6 percent to 368.7 yen per kilogram ($4,419 a metric ton) before settling at 362.6 yen. The price reached a 30-year high of 383 yen on Nov. 11.
Asian stocks advanced after data showed U.S. jobless claims dropped to the lowest level since 2008, bolstering optimism that economic growth will accelerate. Rubber supply from Thailand and other Asian producers remains tight after rain and flooding disrupted plantation work, saidKazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co. in Tokyo.
“The market drew support from good economic data from the U.S.,” Saito said by phone today. “Fundamentals remain positive as supply is curbed by weather problems.”
The cash price of natural rubber in Thailand gained 0.2 percent to 131.55 baht ($4.38) per kilogram today, boosted by strong demand amid a supply shortage, according to the Rubber Research Institute of Thailand. The price reached a record 132.75 baht per kilogram on Nov. 23.
The U.S. Labor Department said jobless claims fell to 407,000 last week. The median projection of economists surveyed by Bloomberg News called for a drop to 435,000. The Thomson Reuters/University of Michigan final index of November consumer sentiment increased to 71.6, the highest level since June and exceeding the median economist estimate of 69.5.
Shanghai Futures
May-delivery rubber in Shanghai lost 1.8 percent to 31,690 yuan ($4,765) a ton at 2:42 p.m. local time. The price retreated from a record 38,920 yuan on Nov. 11 on concern that China, the largest consumer, may take additional steps to curb inflation and slow its economic growth, Saito said.
China’s central bank said it will strengthen liquidity management and “normalize” monetary conditions after having twice this month ordered banks to hold more in reserves to curb inflation that’s at a two-year high.
The nation will use quantitative and price tools to manage liquidity, Hu Xiaolian, a deputy governor of the People’s Bank of China, said in a statement posted to the central bank’s website yesterday. China will also control the pace of bank lending for the remainder of this year as it will be difficult to stay within the government’s 7.5 trillion yuan ($1.13 trillion) target for new loans in 2010, she said.
Premier Wen Jiabao’s government has raised interest rates, increased the reserve requirement for banks and pledged to use price controls if needed as part of efforts to rein in inflation that reached 4.4 percent last month. Analysts at nine banks surveyed by Bloomberg News last week predicted the PBOC will boost borrowing costs a second time by the end of the year.
China’s recent moves to crack down on speculation in commodities have worked, and prices of goods from cotton to copper have all declined, the National Development and Reform Commission said in a statement on its website today.
(Source: http://www.bloomberg.com/news/2010-11-25/rubber-futures-advance-as-u-s-data-raise-demand-outlook-supply-limited.html)
Rubber exporters worried
Posted: 25 Nov 2010 03:13 PM PST
Thailand's rubber exporters are concerned Chinese policies to control inflation will impose import quotas.
China is among the world's largest natural rubber importers and is Thailand's biggest buyer, purchasing 1.16 million tonnes from the kingdom of the 2.46 million total it imported in 2009.
Luckchai Kittipol, president of the Thai Rubber Association, said exporters are concerned about import restrictions.
China's continued robust economy, especially in the automobile industries, has driven demand for rubber the past few years. Demand for rubber was 7.74 million tonnes last year _ 3.47 million tonnes of para rubber and 4.27 million of synthetic rubber.
This year, rubber demand is forecast to reach 8.11 million tonnes, comprising 3.44 million of natural rubber and 4.67 million tonnes of synthetic rubber.
China's capacity in tyre manufacturing totals 654.6 million units while it exports tyres at a rate of 123.22 million radial units.
China expects to buy over 30% of Thailand's 2.85 million tonnes of rubber exports this year.
Mr Luckchai is still optimistic this year's rubber exports will meet the association's target of 200 billion baht in income.
In the first nine months of this year, the country shipped two million tonnes of rubber products worth 170 billion baht.
The association is attending the 10th International Exhibition on Rubber Technology to be held today through Saturday at the Exhibition Centre in Shanghai to explore trade opportunities and showcase technologies and innovation in rubber products from Thailand.
(Source: http://www.bangkokpost.com/business/economics/208032/rubber-exporters-worried)
Tyre makers hit by surging rubber prices
Posted: 25 Nov 2010 03:12 PM PST
Results for the September quarter were a non-event for tyre companies. While these companies were putting together the financials for the period, natural rubber price in the country (RSS-4 grade) shot up sharply beyond the quarter’s average price of around Rs.165 a kg. By mid-October, it jumped toRs.190 per kg and climbed further to the present level of around Rs.202 per kg. This is around 22% higher than last quarter’s average price. The fact that rubber costs account for almost half of the total cost of producing a tyre means that profit margins of these firms will be squeezed.
The surge in prices is not a recent short-term aberration either. Rubber prices have risen by as much as 150% in the past two years, from levels ofRs.76/kg in November 2008.
International prices, too, have shot up in a similar fashion, giving no opportunity for companies to import at lower costs. Reports suggest that the price in Thailand—the world’s largest rubber producing nation—at around $4.3 (Rs.196) a kg, has not only tripled since early 2009, but also surpassed the peak of 1952, when fears of Korean war triggered panic buying.
Prices are rising because of a demand-supply gap. Officials at the Rubber Board of India say that incessant rains hit supply this season. While the cultivation acreage is increasing, it would not be before 2012-13 that the new plantations would add to production. According to estimates by the Rubber Board, India’s rubber production is expected to increase by 9% to 890,000 tonnes in 2010. But demand, supported by the auto boom and high consumerism, would be higher at around 970,000 tonnes, according to industry experts. This gap in supply is expected to keep prices buoyant.
Globally, too, rains played havoc, resulting in lower production in three of the world’s largest rubber producing nations—Thailand, Indonesia and Malaysia. And this comes at a time when rubber inventories are at the year’s low in China.
Like global tyre firms, Indian companies have taken price increases to offset the impact of higher rubber prices. Leading tyre makers such as Apollo Tyres Ltd, MRF Ltd, Ceat Ltd and JK Tyre and Industries Ltd have increased tyre prices by 12-15% in the last one year.
Yet, as the chart indicates, all tyre makers have seen profitability steadily declining in the last four quarters. And this also despite increasing volumes, thanks to the boom in the auto sector. The reason is that raw material cost increases continue to surpass the hike in tyre prices. Apollo’s operating margin fell to 10.3% last quarter, down from 16.4% a year ago, while MRF’s margins fell by 690 basis points to 9.8%. Smaller firms were worse off; Ceat and JK Tyres reported wafer-thin margins of 4% and 6.2%, respectively.
Surjit Arora, an analyst at Prabhudas Lilladher Pvt. Ltd, says that tyre firms may see no respite in profit margins in the next two quarters, unless rubber prices soften. They would have to increase tyre prices by at least 3-6% to sustain the present profit margins.
Shares of all tyre makers have reacted adversely since the first quarter of fiscal 2011, due to fall in profitability and the grim outlook in the near term. Barring MRF, where strong management and low-liquidity support the share price and which rose 16% amidst these adversities, shares of Apollo, Ceat and JK fell by 6%, 10% and 27% from 1 April till date. But strong volumes and revenue momentum could turn the fortunes sharply if the key raw material gives respite.
(Source: http://www.livemint.com/2010/11/25212044/Tyre-makers-hit-by-surging-rub.html?atype=tp)
Friday, November 26, 2010
Spot rubber stays steady
Spot rubber stays steady
Kottayam, Nov. 25
Physical rubber prices finished unchanged on Thursday. The market sustained at previous day's closing levels lacking quantity sellers though the domestic futures were weak on NMCE. According to sources the sentiments were mainly driven by continuous rains and supply concerns and the volumes were narrow. Sheet rubber finished flat at Rs 199.50 both at Kottayam and Kochi according to Rubber board and dealers.
Among other reports, supply of natural rubber (NR) from the ANRPC region, which accounts for about 92 per cent of the global output, is now expected to fall 3.8 per cent in the fourth quarter (October-December) of the current year as per revised figures reported by Member countries in the third week of November.
China's consumption of NR (including NR-rich grades of compound rubber) is anticipated to rise by 7.1 per cent to 3.26 million tonnes during 2010 and by 6 per cent to 3.45 million tonnes during 2011. The growth attained in 2009 was 10.9 per cent. In India and Malaysia, consumption of NR is likely to keep a low pace during the fourth quarter according to Natural Rubber Trends & Statistics, November 2010 released by ANRPC.
Futures decline
RSS 4 declined at the December series to Rs 200.55 (202.14), January to Rs 203.55 (205.01), February to Rs 205.90 (207.43) and March to Rs 209.01 (210.47) a kg on National Multi Commodity Exchange (NMCE).
The volumes stood at 5906 lots and the turnover at Rs 120.69 crores. The total open interest in all series was 6397 lots.
The December futures for RSS 3 improved to ¥359.6 (Rs 195.92) from ¥356.3 during the day session but then fell back to ¥355.4 (Rs 193.65) a kg in the night session on the Tokyo Commodity Exchange (TOCOM). The grade (spot) recovered partially to Rs 200.15 (199.50) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 199.50 (199.50); RSS-5: 187.50 (187.50); ungraded: 183.50 (183.50); ISNR 20: 192.50 (192.50) and latex 60 per cent: 130 (130).
Kottayam, Nov. 25
Physical rubber prices finished unchanged on Thursday. The market sustained at previous day's closing levels lacking quantity sellers though the domestic futures were weak on NMCE. According to sources the sentiments were mainly driven by continuous rains and supply concerns and the volumes were narrow. Sheet rubber finished flat at Rs 199.50 both at Kottayam and Kochi according to Rubber board and dealers.
Among other reports, supply of natural rubber (NR) from the ANRPC region, which accounts for about 92 per cent of the global output, is now expected to fall 3.8 per cent in the fourth quarter (October-December) of the current year as per revised figures reported by Member countries in the third week of November.
China's consumption of NR (including NR-rich grades of compound rubber) is anticipated to rise by 7.1 per cent to 3.26 million tonnes during 2010 and by 6 per cent to 3.45 million tonnes during 2011. The growth attained in 2009 was 10.9 per cent. In India and Malaysia, consumption of NR is likely to keep a low pace during the fourth quarter according to Natural Rubber Trends & Statistics, November 2010 released by ANRPC.
Futures decline
RSS 4 declined at the December series to Rs 200.55 (202.14), January to Rs 203.55 (205.01), February to Rs 205.90 (207.43) and March to Rs 209.01 (210.47) a kg on National Multi Commodity Exchange (NMCE).
The volumes stood at 5906 lots and the turnover at Rs 120.69 crores. The total open interest in all series was 6397 lots.
The December futures for RSS 3 improved to ¥359.6 (Rs 195.92) from ¥356.3 during the day session but then fell back to ¥355.4 (Rs 193.65) a kg in the night session on the Tokyo Commodity Exchange (TOCOM). The grade (spot) recovered partially to Rs 200.15 (199.50) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 199.50 (199.50); RSS-5: 187.50 (187.50); ungraded: 183.50 (183.50); ISNR 20: 192.50 (192.50) and latex 60 per cent: 130 (130).
Thursday, November 25, 2010
Mixed trend in rubber
Mixed trend in rubber
Kottayam, Nov. 24
Spot rubber showed a mixed trend on Wednesday. Most of the traders were hesitant to enhance their commitments in an uncertain market possibly observing a slip in the international rates. Hence the gains were minimal though the domestic futures recovered on NMCE. The transactions were dull.
Sheet rubber improved to Rs 199.50 (199.00) a kg according to Dealers. The grade weakened further to Rs 199.50 (200.50) a kg both at Kottayam and Kochi according to Rubber Board.
Futures gain
The December series bounced back to Rs 202 (199.01), January to Rs 205.24 (202.30), February to Rs 207.44 (204.79) and March to Rs 210.50 (208.16) a kg for RSS 4 on National Multi Commodity Exchange (NMCE).
The November futures for RSS 3 expired at ¥354.9 (Rs 194.95) while the December futures declined to ¥356.3 (Rs 195.70) from ¥368.5 during the day session and then recovered partially to ¥356.9 (Rs 196.05) a kg in the night session on the Tokyo Commodity Exchange (TOCOM). The grade (spot) moved down Rs 199.50 (201.30) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 199.50 (199); RSS-5: 187.50 (187.50); ungraded: 183.50 (183.50); ISNR 20: 192.50 (193) and latex 60 per cent: 130 (130).
Rubber Futures Decline on China's Price-Cooling Moves, Tension Over Korea
Posted: 24 Nov 2010 01:33 AM PST
Rubber declined for the first time in four days on concern that China’s measures to tame inflation may curb demand from the world’s largest user and after North Korea attacked South Korea, weakening investor risk appetite.
April-delivery rubber on the Tokyo Commodity Exchange slumped as much as 3.6 percent to 356.4 yen per kilogram ($4,283 a metric ton) before settling at 359.5 yen. It also dropped as Standard & Poor’s Ratings Services cut Ireland’s credit rating, raising concern that Europe’s debt crisis may stall the region’s economic recovery. The market was closed yesterday for a holiday.
China will crack down on the use of loan funds in speculation, hoarding and artificially inflating prices of agricultural products, the China Banking Regulatory Commission said on Nov. 22, sending rubber futures in Shanghai tumbling by the daily limit yesterday. South Korea’s stocksand currency sank after North Korea fired artillery, killing two soldiers.
“Rubber was sold as tension in Korea sapped investor appetite for risk assets,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone. “Caution about China’s steps to curb inflation was another drag on rubber futures.”
May-delivery rubber fell as much as 2.9 percent to 31,300 yuan ($4,707) a ton before gaining 0.2 percent to close at 32,285 yuan on the Shanghai Futures Exchange. The contract reached a record 38,920 yuan on Nov. 11.
China, the biggest buyer, ordered banks on Nov. 19 to set aside larger reserves for the second time in two weeks. The move to contain excess liquidity came after Premier Wen Jiabao held a Cabinet meeting earlier in the week and called for a crackdown on speculation in agricultural goods, saying price controls may be needed on “daily necessities.”
China Controls
China’s cabinet said last week it may impose temporary price controls after inflation gained the most since September 2008 and food prices climbed 10.1 percent.
Rubber in Tokyo has climbed 32 percent this year as heavy rain in Thailand, Indonesia and Malaysia, the top three growers, disrupted tapping and lowered production.
The cash price of natural rubber in Thailand, the largest producer and exporter, fell 1.1 percent to 131.25 baht ($4.36) per kilogram today as worries over China attempt to curb inflation and Ireland debt crisis prompted investors to reduce position in agricultural contracts, according tothe Rubber Research Institute of Thailand. The downside is limited because of supply shortage from major producers, it said. Thai price yesterday reached a record 132.75 baht per kilogram.
Ireland’s debt rating was lowered two steps by Standard & Poor’s, with a negative outlook, as the nation’s bailout of its banking system is set to escalate the government’s borrowing needs. Ireland is hammering out an aid package with the EU and the International Monetary Fund to rescue its banking system.
(Source: http://www.bloomberg.com/news/2010-11-24/rubber-futures-decline-on-china-s-credit-crackdown-north-korean-attack.html)
China Rubber Futures Fall After Crackdown on Bank Credit for Speculation
Posted: 23 Nov 2010 05:29 PM PST
Natural rubber futures in Shanghai dropped by the daily 5 percent limit after the government said it would crack down on the use of bank credit to speculate in the agricultural market. Palm oil, sugar and rice also dropped.
The most-actively traded contract for May delivery fell to 32,220 yuan ($4,849) a metric ton on the Shanghai Futures Exchange. The contract has fallen more than 12 percent since Nov. 11, when China said its October consumer prices rose a more-than-forecast 4.4 percent from a year earlier, prompting the government to further tighten the monetary policy.
China will strictly crack down on the use of loan funds in speculation, hoarding and artificially inflating prices of agricultural products, the China Banking Regulatory Commission said on its website yesterday. China’s cabinet said last week it is also increasing grain supplies and may impose temporary price controls after inflation gained the most since September 2008 and food prices climbed 10.1 percent.
“The banking regulator became the latest government agency joining the crackdown on speculation in the agricultural market,” said Forrest Hu, manager at Shanghai Jinhuicheng International Trade Co.
Farm products prices have fallen in the past week since the government’s coordinated efforts to suppress speculation and increase supply by selling government stockpiles of sugar, pork and cooking oil.
Palm oil futures for September delivery on the Dalian Commodity Exchange fell 0.8 percent to 8,488 yuan a ton by the 11:30 a.m. local time break and have dropped almost 12 percent since Nov. 11. Sugar for delivery in the same month dropped 0.2 percent to 6,307 yuan and has fallen 13 percent in the same period.
Rubber also fell because of rising commercial inventories, Hu said. Natural rubber inventoriesrose for an eighth consecutive week to a seven-month high, gaining 705 tons to 60,996 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the exchange said on Nov. 19.
(Source: http://www.bloomberg.com/news/2010-11-23/china-rubber-futures-fall-after-crackdown-on-bank-credit-for-speculation.html)
Price reaction: Rubber high spurs extra planting
Posted: 23 Nov 2010 05:26 PM PST
CAMBODIA’S rubber farmers are looking to expand plantations after the price of rubber hit more than US$4,000 per tonne this month.
Yesterday, April-delivery rubber on the Tokyo Commodity Exchange climbed as much as 2.1 percent to 375.3 yen per kilogram ($4,498 a tonne). The contract has climbed 13 percent this month as heavy rain in Thailand, Indonesia and Malaysia, the top three growers, disrupted tapping and lowered production.
Pouy Bun Eng, of Chamkar Leu district, in Kampong Cham province, said she expanded her 50 hectare plantation by another seven hectares last month.
“I am happy because of the current high price,” she said.
While Kampong Cham province’s Tbong Khmum Family Rubber Association President Thy Sambo said that he expected further increases in the price of resin this month. He warned, however that the crop took a long time to grow.
Ly Phalla, director of the Rubber Department at the Ministry of Agriculture, Forestry and Fisheries, said that high demand was pushing prices and the trend was set to continue.
Cambodia grows rubber on more 16.5000 hectares of land and produce more than 40,000 tonnes each year.
(Source: http://www.phnompenhpost.com/index.php/2010112344904/Business/price-reaction-rubber-high-spurs-extra-planting.html)
Tyre companies challenge Rubber Board data
Posted: 23 Nov 2010 05:25 PM PST
Tyre companies have criticised the state-run Rubber Board for inflating rubber stock position and stated that the board's claim of sitting on stocks of more than 3 lakh tonne was merely 'on paper'.
The closing stock, as reported by the Rubber Board to the Association of Natural Rubber Producing Countries(ANRPC), has been pegged at 38% of the country's total natural rubber production. Even world's largest rubber producing countries including Thailand, Malaysia and Indonesia have closing stocks at mere 7%, 14% and 3%, respectively, of their production.
“At a time when rubber prices are ruling at an all-time high and the very availability is a concern, such tall stock claims are unrealistic,” Rajiv Budhraja, director-general, Automative Tyre Manufacturers Association (ATMA) told FE.
The association is planning to send a reminder to the Centre contesting the claims made by the Rubber Board. The tyre makers had earlier lobbied for allowing imports at nil duty
to bring down the cost of production.
Based on the recently issued ANRPC statistics, tyre industry has been keeping tab on the rubber flow to the market. ATMA points out that India’s closing rubber stocks have been rising. It currently stands at a significant 31% of the total natural rubber stock of major ANRPC, while India accounts for just 9% of the total production of ANRPC. ATMA said that closing stock of China- the world’s biggest rubber consumer- is only 6% of its total consumption. But India has one third of its total consumption stockpiled as stock....
(Source: http://www.financialexpress.com/news/tyre-companies-challenge-rubber-board-data/715022/0)
Kottayam, Nov. 24
Spot rubber showed a mixed trend on Wednesday. Most of the traders were hesitant to enhance their commitments in an uncertain market possibly observing a slip in the international rates. Hence the gains were minimal though the domestic futures recovered on NMCE. The transactions were dull.
Sheet rubber improved to Rs 199.50 (199.00) a kg according to Dealers. The grade weakened further to Rs 199.50 (200.50) a kg both at Kottayam and Kochi according to Rubber Board.
Futures gain
The December series bounced back to Rs 202 (199.01), January to Rs 205.24 (202.30), February to Rs 207.44 (204.79) and March to Rs 210.50 (208.16) a kg for RSS 4 on National Multi Commodity Exchange (NMCE).
The November futures for RSS 3 expired at ¥354.9 (Rs 194.95) while the December futures declined to ¥356.3 (Rs 195.70) from ¥368.5 during the day session and then recovered partially to ¥356.9 (Rs 196.05) a kg in the night session on the Tokyo Commodity Exchange (TOCOM). The grade (spot) moved down Rs 199.50 (201.30) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 199.50 (199); RSS-5: 187.50 (187.50); ungraded: 183.50 (183.50); ISNR 20: 192.50 (193) and latex 60 per cent: 130 (130).
Rubber Futures Decline on China's Price-Cooling Moves, Tension Over Korea
Posted: 24 Nov 2010 01:33 AM PST
Rubber declined for the first time in four days on concern that China’s measures to tame inflation may curb demand from the world’s largest user and after North Korea attacked South Korea, weakening investor risk appetite.
April-delivery rubber on the Tokyo Commodity Exchange slumped as much as 3.6 percent to 356.4 yen per kilogram ($4,283 a metric ton) before settling at 359.5 yen. It also dropped as Standard & Poor’s Ratings Services cut Ireland’s credit rating, raising concern that Europe’s debt crisis may stall the region’s economic recovery. The market was closed yesterday for a holiday.
China will crack down on the use of loan funds in speculation, hoarding and artificially inflating prices of agricultural products, the China Banking Regulatory Commission said on Nov. 22, sending rubber futures in Shanghai tumbling by the daily limit yesterday. South Korea’s stocksand currency sank after North Korea fired artillery, killing two soldiers.
“Rubber was sold as tension in Korea sapped investor appetite for risk assets,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd. in Tokyo, said today by phone. “Caution about China’s steps to curb inflation was another drag on rubber futures.”
May-delivery rubber fell as much as 2.9 percent to 31,300 yuan ($4,707) a ton before gaining 0.2 percent to close at 32,285 yuan on the Shanghai Futures Exchange. The contract reached a record 38,920 yuan on Nov. 11.
China, the biggest buyer, ordered banks on Nov. 19 to set aside larger reserves for the second time in two weeks. The move to contain excess liquidity came after Premier Wen Jiabao held a Cabinet meeting earlier in the week and called for a crackdown on speculation in agricultural goods, saying price controls may be needed on “daily necessities.”
China Controls
China’s cabinet said last week it may impose temporary price controls after inflation gained the most since September 2008 and food prices climbed 10.1 percent.
Rubber in Tokyo has climbed 32 percent this year as heavy rain in Thailand, Indonesia and Malaysia, the top three growers, disrupted tapping and lowered production.
The cash price of natural rubber in Thailand, the largest producer and exporter, fell 1.1 percent to 131.25 baht ($4.36) per kilogram today as worries over China attempt to curb inflation and Ireland debt crisis prompted investors to reduce position in agricultural contracts, according tothe Rubber Research Institute of Thailand. The downside is limited because of supply shortage from major producers, it said. Thai price yesterday reached a record 132.75 baht per kilogram.
Ireland’s debt rating was lowered two steps by Standard & Poor’s, with a negative outlook, as the nation’s bailout of its banking system is set to escalate the government’s borrowing needs. Ireland is hammering out an aid package with the EU and the International Monetary Fund to rescue its banking system.
(Source: http://www.bloomberg.com/news/2010-11-24/rubber-futures-decline-on-china-s-credit-crackdown-north-korean-attack.html)
China Rubber Futures Fall After Crackdown on Bank Credit for Speculation
Posted: 23 Nov 2010 05:29 PM PST
Natural rubber futures in Shanghai dropped by the daily 5 percent limit after the government said it would crack down on the use of bank credit to speculate in the agricultural market. Palm oil, sugar and rice also dropped.
The most-actively traded contract for May delivery fell to 32,220 yuan ($4,849) a metric ton on the Shanghai Futures Exchange. The contract has fallen more than 12 percent since Nov. 11, when China said its October consumer prices rose a more-than-forecast 4.4 percent from a year earlier, prompting the government to further tighten the monetary policy.
China will strictly crack down on the use of loan funds in speculation, hoarding and artificially inflating prices of agricultural products, the China Banking Regulatory Commission said on its website yesterday. China’s cabinet said last week it is also increasing grain supplies and may impose temporary price controls after inflation gained the most since September 2008 and food prices climbed 10.1 percent.
“The banking regulator became the latest government agency joining the crackdown on speculation in the agricultural market,” said Forrest Hu, manager at Shanghai Jinhuicheng International Trade Co.
Farm products prices have fallen in the past week since the government’s coordinated efforts to suppress speculation and increase supply by selling government stockpiles of sugar, pork and cooking oil.
Palm oil futures for September delivery on the Dalian Commodity Exchange fell 0.8 percent to 8,488 yuan a ton by the 11:30 a.m. local time break and have dropped almost 12 percent since Nov. 11. Sugar for delivery in the same month dropped 0.2 percent to 6,307 yuan and has fallen 13 percent in the same period.
Rubber also fell because of rising commercial inventories, Hu said. Natural rubber inventoriesrose for an eighth consecutive week to a seven-month high, gaining 705 tons to 60,996 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the exchange said on Nov. 19.
(Source: http://www.bloomberg.com/news/2010-11-23/china-rubber-futures-fall-after-crackdown-on-bank-credit-for-speculation.html)
Price reaction: Rubber high spurs extra planting
Posted: 23 Nov 2010 05:26 PM PST
CAMBODIA’S rubber farmers are looking to expand plantations after the price of rubber hit more than US$4,000 per tonne this month.
Yesterday, April-delivery rubber on the Tokyo Commodity Exchange climbed as much as 2.1 percent to 375.3 yen per kilogram ($4,498 a tonne). The contract has climbed 13 percent this month as heavy rain in Thailand, Indonesia and Malaysia, the top three growers, disrupted tapping and lowered production.
Pouy Bun Eng, of Chamkar Leu district, in Kampong Cham province, said she expanded her 50 hectare plantation by another seven hectares last month.
“I am happy because of the current high price,” she said.
While Kampong Cham province’s Tbong Khmum Family Rubber Association President Thy Sambo said that he expected further increases in the price of resin this month. He warned, however that the crop took a long time to grow.
Ly Phalla, director of the Rubber Department at the Ministry of Agriculture, Forestry and Fisheries, said that high demand was pushing prices and the trend was set to continue.
Cambodia grows rubber on more 16.5000 hectares of land and produce more than 40,000 tonnes each year.
(Source: http://www.phnompenhpost.com/index.php/2010112344904/Business/price-reaction-rubber-high-spurs-extra-planting.html)
Tyre companies challenge Rubber Board data
Posted: 23 Nov 2010 05:25 PM PST
Tyre companies have criticised the state-run Rubber Board for inflating rubber stock position and stated that the board's claim of sitting on stocks of more than 3 lakh tonne was merely 'on paper'.
The closing stock, as reported by the Rubber Board to the Association of Natural Rubber Producing Countries(ANRPC), has been pegged at 38% of the country's total natural rubber production. Even world's largest rubber producing countries including Thailand, Malaysia and Indonesia have closing stocks at mere 7%, 14% and 3%, respectively, of their production.
“At a time when rubber prices are ruling at an all-time high and the very availability is a concern, such tall stock claims are unrealistic,” Rajiv Budhraja, director-general, Automative Tyre Manufacturers Association (ATMA) told FE.
The association is planning to send a reminder to the Centre contesting the claims made by the Rubber Board. The tyre makers had earlier lobbied for allowing imports at nil duty
to bring down the cost of production.
Based on the recently issued ANRPC statistics, tyre industry has been keeping tab on the rubber flow to the market. ATMA points out that India’s closing rubber stocks have been rising. It currently stands at a significant 31% of the total natural rubber stock of major ANRPC, while India accounts for just 9% of the total production of ANRPC. ATMA said that closing stock of China- the world’s biggest rubber consumer- is only 6% of its total consumption. But India has one third of its total consumption stockpiled as stock....
(Source: http://www.financialexpress.com/news/tyre-companies-challenge-rubber-board-data/715022/0)
Wednesday, November 24, 2010
Spot rubber prices decline
Spot rubber prices decline
Kottayam, Nov. 23
Physical rubber prices declined on Tuesday. According to observers, the prices fell following the sharp losses in domestic futures on NMCE. Though there has been only marginal selling pressure from dealers, the market surrendered mainly on buyer resistance with slight improvement in volumes.
Sheet rubber moved down to Rs 199 (201) a kg according to dealers. The grade finished flat at Rs 200.50 a kg both at Kottayam and Kochi as reported by the Rubber Board.
Futures down
In futures, the December series nosedived to Rs 199 (203.86), January to Rs 202.30 (206.88), February to Rs 204.80 (208.83) and March to Rs 208.49 (211.76) a kg for RSS 4 on National Multi Commodity Exchange (NMCE).
The volumes stood at 7530 lots and the turnover at Rs 153.18 crores. The total open interest in all series was 5868 lots.
RSS 3 (spot) closed at Rs 201.30 (201.22) a kg at Bangkok. The Tokyo Commodity Exchange (TOCOM) remained closed on account of Labour Thanksgiving Day.
Spot rates were (Rs/kg): RSS-4: 199 (201); RSS-5: 187.50 (189); ungraded: 183.50 (185); ISNR 20: 193 (194) and latex 60 per cent: 130 (130).
Kottayam, Nov. 23
Physical rubber prices declined on Tuesday. According to observers, the prices fell following the sharp losses in domestic futures on NMCE. Though there has been only marginal selling pressure from dealers, the market surrendered mainly on buyer resistance with slight improvement in volumes.
Sheet rubber moved down to Rs 199 (201) a kg according to dealers. The grade finished flat at Rs 200.50 a kg both at Kottayam and Kochi as reported by the Rubber Board.
Futures down
In futures, the December series nosedived to Rs 199 (203.86), January to Rs 202.30 (206.88), February to Rs 204.80 (208.83) and March to Rs 208.49 (211.76) a kg for RSS 4 on National Multi Commodity Exchange (NMCE).
The volumes stood at 7530 lots and the turnover at Rs 153.18 crores. The total open interest in all series was 5868 lots.
RSS 3 (spot) closed at Rs 201.30 (201.22) a kg at Bangkok. The Tokyo Commodity Exchange (TOCOM) remained closed on account of Labour Thanksgiving Day.
Spot rates were (Rs/kg): RSS-4: 199 (201); RSS-5: 187.50 (189); ungraded: 183.50 (185); ISNR 20: 193 (194) and latex 60 per cent: 130 (130).
Tuesday, November 23, 2010
Mixed trend in rubber
Mixed trend in rubber
Kottayam, Nov. 22
Spot rubber showed a mixed trend on Monday. The undercurrent was firm on supply concerns as rains continued to hit almost all the plantation areas. Major grades improved on fresh buying and short covering as there were no quantity sellers even during closing hours. The volumes were not impressive.
Sheet rubber increased to Rs 201 (200) a kg in the main marketing centres. The grade firmed up to Rs 200.50 (199.50) a kg both at Kottayam and Kochi according to the Rubber Board.
Futures improve
The December series improved to Rs 204.00 (202.92), January to Rs 206.80 (206.26), February to Rs 208.75 (208.52) and March to Rs 211.76 (211.75) a kg for RSS 4 on National Multi Commodity Exchange (NMCE).
The volumes stood at 5774 lots and the turnover at Rs 118.96 crores. The total open interest in all series was 5768 lots.
RSS 3 firmed up at its November futures to ¥367 (Rs 199.57) from ¥365.5 during the day session but then weakened to ¥365 (Rs 198.52) a kg in the night session on the Tokyo Commodity Exchange (TOCOM). The grade (spot) improved to Rs 201.22 (200.79) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 201 (200); RSS-5: 189 (188); ungraded: 185 (184); ISNR 20: 194 (194) and latex 60 per cent: 130 (130).
Rubber Advances for Third Day as Ireland Seeks Bank Bailout, Tight Supply
Posted: 22 Nov 2010 06:02 AM PST
Rubber advanced for a third day as the yen weakened against the euro amid optimism that an agreement to rescue Ireland’s banks will prevent contagion across European debt markets, while supply remained tight. The cash price in Thailand climbed to a record.
April-delivery rubber on the Tokyo Commodity Exchange climbed as much as 2.1 percent to 375.3 yen per kilogram ($4,500 a metric ton) before settling at 369.8 yen. The most-active contract has climbed 13 percent this month as heavy rain in Thailand, Indonesia and Malaysia, the top three growers, disrupted tapping and lowered production.
“Worries over the debt situation in Europe have eased, improving sentiment and raising optimism that demand for the commodity will grow,” said Chaiwat Muenmee, analyst at DS Futures Co. “The low supply level is also supportive,” he said.
Irish Prime Minister Brian Cowen said on Nov. 21 in Dublin that he expects talks on the details of financial assistance from the European Union and the International Monetary Fund for Ireland to be completed in the “next few weeks.” Finance Minister Brian Lenihan said the loan will be less than 100 billion euros ($137 billion).
The yen depreciated to 114.85 against the euro, compared with 113.65 at the close of stock trading in Tokyo on Nov. 19. A weaker yen improves the appeal of yen-denominated contracts.
Cash-Price Record
Investors are still concerned about tight supplies from Thailand, Indonesia and Malaysia, said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co.
The cash price in Thailand, the largest exporter, climbed to a record 132.75 baht ($4.44) per kilogram today as floods devastated trees, lowering production in the country’s south, according to the Rubber Research Institute of Thailand. The southern provinces account for 68 percent of the country’s total plantation area.
May-delivery rubber on the Shanghai Futures Exchange declined as much as 3.5 percent to 33,200 yuan ($5,000) a ton before closing at 33,215 yuan.
“The upside is limited on concerns over China’s measures to fight inflation,” Chaiwat at DS Futures said.
China, the biggest buyer, ordered banks on Nov. 19 to set aside larger reserves for the second time in two weeks. The latest move to contain excess liquidity came after Premier Wen Jiabaoheld a Cabinet meeting earlier in the week and called for a crackdown on speculation in agricultural goods, saying price controls may be needed on “daily necessities.”
China’s natural-rubber inventories rose for an eighth consecutive week to a seven-month high, gaining 705 tons to 60,996 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the exchange said Nov. 19.
(Source: http://www.bloomberg.com/news/2010-11-22/rubber-advances-for-third-day-as-ireland-seeks-bank-bailout-tight-supply.html)
NR Consumers May Have No Say In Physical NR Prices
Posted: 22 Nov 2010 06:01 AM PST
There was no report on IRCo’s Daily Composite Price (DCP) on 17 November as some physical rubber markets in the region closed. However, IRCo’s technical indicators and market fundamental factors in general were still in positive territory during 17 - 18 November.
On the rubber futures front, Tokyo and Shanghai rubber futures tracked the falls in other commodity and stock markets on 17 November as investors were still concerned about Irish debts and a rise in Chinese inflation. A day after Tokyo rubber futures rebounded on the back of support mainly from a rebound in oil prices and a weakening Japanese yen, but the benchmark price for the most active month on Shanghai rubber futures settled slightly lower on the same day as investors feared that China’s central bank would increase interest rates and Beijing would control prices of necessities and commodities, including rubber fures in the country.
Kottayam, Nov. 22
Spot rubber showed a mixed trend on Monday. The undercurrent was firm on supply concerns as rains continued to hit almost all the plantation areas. Major grades improved on fresh buying and short covering as there were no quantity sellers even during closing hours. The volumes were not impressive.
Sheet rubber increased to Rs 201 (200) a kg in the main marketing centres. The grade firmed up to Rs 200.50 (199.50) a kg both at Kottayam and Kochi according to the Rubber Board.
Futures improve
The December series improved to Rs 204.00 (202.92), January to Rs 206.80 (206.26), February to Rs 208.75 (208.52) and March to Rs 211.76 (211.75) a kg for RSS 4 on National Multi Commodity Exchange (NMCE).
The volumes stood at 5774 lots and the turnover at Rs 118.96 crores. The total open interest in all series was 5768 lots.
RSS 3 firmed up at its November futures to ¥367 (Rs 199.57) from ¥365.5 during the day session but then weakened to ¥365 (Rs 198.52) a kg in the night session on the Tokyo Commodity Exchange (TOCOM). The grade (spot) improved to Rs 201.22 (200.79) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 201 (200); RSS-5: 189 (188); ungraded: 185 (184); ISNR 20: 194 (194) and latex 60 per cent: 130 (130).
Rubber Advances for Third Day as Ireland Seeks Bank Bailout, Tight Supply
Posted: 22 Nov 2010 06:02 AM PST
Rubber advanced for a third day as the yen weakened against the euro amid optimism that an agreement to rescue Ireland’s banks will prevent contagion across European debt markets, while supply remained tight. The cash price in Thailand climbed to a record.
April-delivery rubber on the Tokyo Commodity Exchange climbed as much as 2.1 percent to 375.3 yen per kilogram ($4,500 a metric ton) before settling at 369.8 yen. The most-active contract has climbed 13 percent this month as heavy rain in Thailand, Indonesia and Malaysia, the top three growers, disrupted tapping and lowered production.
“Worries over the debt situation in Europe have eased, improving sentiment and raising optimism that demand for the commodity will grow,” said Chaiwat Muenmee, analyst at DS Futures Co. “The low supply level is also supportive,” he said.
Irish Prime Minister Brian Cowen said on Nov. 21 in Dublin that he expects talks on the details of financial assistance from the European Union and the International Monetary Fund for Ireland to be completed in the “next few weeks.” Finance Minister Brian Lenihan said the loan will be less than 100 billion euros ($137 billion).
The yen depreciated to 114.85 against the euro, compared with 113.65 at the close of stock trading in Tokyo on Nov. 19. A weaker yen improves the appeal of yen-denominated contracts.
Cash-Price Record
Investors are still concerned about tight supplies from Thailand, Indonesia and Malaysia, said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co.
The cash price in Thailand, the largest exporter, climbed to a record 132.75 baht ($4.44) per kilogram today as floods devastated trees, lowering production in the country’s south, according to the Rubber Research Institute of Thailand. The southern provinces account for 68 percent of the country’s total plantation area.
May-delivery rubber on the Shanghai Futures Exchange declined as much as 3.5 percent to 33,200 yuan ($5,000) a ton before closing at 33,215 yuan.
“The upside is limited on concerns over China’s measures to fight inflation,” Chaiwat at DS Futures said.
China, the biggest buyer, ordered banks on Nov. 19 to set aside larger reserves for the second time in two weeks. The latest move to contain excess liquidity came after Premier Wen Jiabaoheld a Cabinet meeting earlier in the week and called for a crackdown on speculation in agricultural goods, saying price controls may be needed on “daily necessities.”
China’s natural-rubber inventories rose for an eighth consecutive week to a seven-month high, gaining 705 tons to 60,996 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the exchange said Nov. 19.
(Source: http://www.bloomberg.com/news/2010-11-22/rubber-advances-for-third-day-as-ireland-seeks-bank-bailout-tight-supply.html)
NR Consumers May Have No Say In Physical NR Prices
Posted: 22 Nov 2010 06:01 AM PST
There was no report on IRCo’s Daily Composite Price (DCP) on 17 November as some physical rubber markets in the region closed. However, IRCo’s technical indicators and market fundamental factors in general were still in positive territory during 17 - 18 November.
On the rubber futures front, Tokyo and Shanghai rubber futures tracked the falls in other commodity and stock markets on 17 November as investors were still concerned about Irish debts and a rise in Chinese inflation. A day after Tokyo rubber futures rebounded on the back of support mainly from a rebound in oil prices and a weakening Japanese yen, but the benchmark price for the most active month on Shanghai rubber futures settled slightly lower on the same day as investors feared that China’s central bank would increase interest rates and Beijing would control prices of necessities and commodities, including rubber fures in the country.
Sunday, November 21, 2010
Spot rubber rules steady
Spot rubber rules steady
Kottayam, Nov. 20
The physical rubber prices finished unchanged on Saturday. The market lost its direction though the domestic futures finished in green with minor variations. Sheet rubber closed steady at Rs 200 a kg both at Kottayam and Kochi. Most of the traders were inactive possibly since the international markets were on weekend holidays and the volumes were extremely low in a comparatively dull trading session.
Futures improve
The December futures improved marginally to Rs 202.92 (202.90), January to Rs 206.26 (205.89), February to Rs 208.52 (208.21) and March to Rs 211.75 (211.18) a kg for RSS 4 on National Multi Commodity Exchange (NMCE).
Spot rates were (Rs/kg): RSS-4: 200 (200); RSS-5: 188 (188); ungraded: 184 (184); ISNR 20: 194 (194) and latex 60 per cent: 130 (130).
Rubber prices may extend gains
Posted: 20 Nov 2010 11:23 PM PST
Prices on the Malaysian rubber market is expected to extend its gains into next week amid tight raw material supplies.
"Bad weather conditions has been disrupting output and the market's direction next week will be determined by external leads mainly from the Tokyo Commodity Exchange and Shanghai Rubber Futures market," a dealer said.
Meanwhile, Thai rubber production is expected to fall by 30,000 tonnes, annually, for the next six years following damages caused by floods.
He said future steps taken by China to combat inflation and its effect on demand would take a toll on prices.
For the just-ended week, the Malaysian Rubber Board's official physical noon price for tyre-grade SMR 20 declined to 1,329.5 sen per kg from 1,342.0 sen last Friday, while latex-in-bulk increased to 874.5 sen per kg from 862 sen, previously.
The market was closed last Wednesday in conjunction with the Hari Raya Aidiladha celebration.
Meanwhile, the unofficial closing price for tyre-grade SMR 20 jumped to 1,337.5 sen per kg, from 1,328.0 sen last Friday, while latex-in-bulk rose to 878.0 sen per kg from 860.0 sen, previously. -- Bernama
(Source: http://www.btimes.com.my/Current_News/BTIMES/articles/20101120121320/Article/index_html)
Asian rubber: tyremakers keep buying despite high prices
Posted: 20 Nov 2010 11:18 PM PST
BANGKOK (November 21, 2010) : Major tyremakers are buying Asian rubber for nearby shipment despite high prices, although Chinese consumers are staying on the sidelines, reluctant to pay such rates, dealers said on Tuesday. Major tyremakers, including Bridgestone and Goodyear, are buying Indonesian SIR20 at 191.50 US cents/lb for prompt shipment, they said.
"Most tyremakers have shifted to buy Indonesian grade as it is generally considered the cheapest grade in the region," a Singapore-based trader said. Dealers said most consumers finally accepted the high prices as they realised they would not drop significantly to the levels of about $3.00 per kg seen at the same time last year.
Some traders were still buying Thai rubber, even though it was relatively expensive. "It seems like they realise there's no more cheap rubber," said a dealer in the southern Thai town of Hat Yai, the centre of the country's rubber trade.
Benchmark Thai RSS3 was bought at $4.27 per kg for January shipment, slightly below a record high of $4.40 per kg traded last week. Thai rubber grade as well as other Asian rubber grades changed hands at record levels last week, tracking Tokyo Futures rubber prices (TOCOM) which jumped to a 30-year high.
TOCOM rubber surged to a 30-year peak of 388.9 yen per kg, the highest since 1980, on the back of supply concerns after Thailand, the world's biggest producer, was hit by severe flooding that disrupted tapping and delayed shipments. However, dealers said Chinese tyremakers were staying out of the market, waiting to buy only when prices dropped. "They're waiting to buy when TOCOM prices drop, expecting physical prices to drop as well. But they still buy in dribs and drabs," one dealer said.
WEEK AHEAD The rainy season in Thailand's south is likely to end over the next couple of weeks and traders said they expect no more rain in December and prices should drop gradually.
(Source: http://www.brecorder.com/news/agriculture-and-allied/world/1126024:asian-rubber-tyremakers-keep-buying-despite-high-prices.html)
Kottayam, Nov. 20
The physical rubber prices finished unchanged on Saturday. The market lost its direction though the domestic futures finished in green with minor variations. Sheet rubber closed steady at Rs 200 a kg both at Kottayam and Kochi. Most of the traders were inactive possibly since the international markets were on weekend holidays and the volumes were extremely low in a comparatively dull trading session.
Futures improve
The December futures improved marginally to Rs 202.92 (202.90), January to Rs 206.26 (205.89), February to Rs 208.52 (208.21) and March to Rs 211.75 (211.18) a kg for RSS 4 on National Multi Commodity Exchange (NMCE).
Spot rates were (Rs/kg): RSS-4: 200 (200); RSS-5: 188 (188); ungraded: 184 (184); ISNR 20: 194 (194) and latex 60 per cent: 130 (130).
Rubber prices may extend gains
Posted: 20 Nov 2010 11:23 PM PST
Prices on the Malaysian rubber market is expected to extend its gains into next week amid tight raw material supplies.
"Bad weather conditions has been disrupting output and the market's direction next week will be determined by external leads mainly from the Tokyo Commodity Exchange and Shanghai Rubber Futures market," a dealer said.
Meanwhile, Thai rubber production is expected to fall by 30,000 tonnes, annually, for the next six years following damages caused by floods.
He said future steps taken by China to combat inflation and its effect on demand would take a toll on prices.
For the just-ended week, the Malaysian Rubber Board's official physical noon price for tyre-grade SMR 20 declined to 1,329.5 sen per kg from 1,342.0 sen last Friday, while latex-in-bulk increased to 874.5 sen per kg from 862 sen, previously.
The market was closed last Wednesday in conjunction with the Hari Raya Aidiladha celebration.
Meanwhile, the unofficial closing price for tyre-grade SMR 20 jumped to 1,337.5 sen per kg, from 1,328.0 sen last Friday, while latex-in-bulk rose to 878.0 sen per kg from 860.0 sen, previously. -- Bernama
(Source: http://www.btimes.com.my/Current_News/BTIMES/articles/20101120121320/Article/index_html)
Asian rubber: tyremakers keep buying despite high prices
Posted: 20 Nov 2010 11:18 PM PST
BANGKOK (November 21, 2010) : Major tyremakers are buying Asian rubber for nearby shipment despite high prices, although Chinese consumers are staying on the sidelines, reluctant to pay such rates, dealers said on Tuesday. Major tyremakers, including Bridgestone and Goodyear, are buying Indonesian SIR20 at 191.50 US cents/lb for prompt shipment, they said.
"Most tyremakers have shifted to buy Indonesian grade as it is generally considered the cheapest grade in the region," a Singapore-based trader said. Dealers said most consumers finally accepted the high prices as they realised they would not drop significantly to the levels of about $3.00 per kg seen at the same time last year.
Some traders were still buying Thai rubber, even though it was relatively expensive. "It seems like they realise there's no more cheap rubber," said a dealer in the southern Thai town of Hat Yai, the centre of the country's rubber trade.
Benchmark Thai RSS3 was bought at $4.27 per kg for January shipment, slightly below a record high of $4.40 per kg traded last week. Thai rubber grade as well as other Asian rubber grades changed hands at record levels last week, tracking Tokyo Futures rubber prices (TOCOM) which jumped to a 30-year high.
TOCOM rubber surged to a 30-year peak of 388.9 yen per kg, the highest since 1980, on the back of supply concerns after Thailand, the world's biggest producer, was hit by severe flooding that disrupted tapping and delayed shipments. However, dealers said Chinese tyremakers were staying out of the market, waiting to buy only when prices dropped. "They're waiting to buy when TOCOM prices drop, expecting physical prices to drop as well. But they still buy in dribs and drabs," one dealer said.
WEEK AHEAD The rainy season in Thailand's south is likely to end over the next couple of weeks and traders said they expect no more rain in December and prices should drop gradually.
(Source: http://www.brecorder.com/news/agriculture-and-allied/world/1126024:asian-rubber-tyremakers-keep-buying-despite-high-prices.html)
Saturday, November 20, 2010
Rubber Futures Advance for Second Day on Tight Supply, U.S. Economic Data
Rubber Futures Advance for Second Day on Tight Supply, U.S. Economic Data
Posted: 19 Nov 2010 03:43 AM PST
Rubber climbed for a second day as U.S. jobless claims and manufacturing data boosted optimism that the economic recovery is gathering pace amid tight supply from major producers in Southeast Asia.
April-delivery rubber on the Tokyo Commodity Exchange surged as much as 3.8 percent to 375.9 yen per kilogram ($4,502 a metric ton) before settling at 367.7 yen. The most-active contract has gained 2.1 percent this week and climbed 33 percent this year as heavy rain in Thailand, Indonesia and Malaysia, the top three growers, has disrupted tapping and lowered production.
“Worries over the Irish debt problem have eased and U.S. economic data are supportive, raising optimism demand for the commodity will continue to grow,” Varut Rungkhum, analyst at commodity broker Agro Wealth Ltd., said by phone from Bangkok.
Ireland will probably seek a bailout from the European Union and International Monetary Fund worth “tens of billions” of euros to rescue its battered banks, central bank Governor Patrick Honohan told Irish state broadcaster RTE yesterday. Fewer workers than forecast filed for U.S. jobless benefits, while Philadelphia-area manufacturing topped estimates.
May-delivery rubber on the Shanghai Futures Exchange gained by the daily 5 percent limit to 34,415 yuan ($5,185) a ton and closed at that level. The contract has lost 3.8 percent this week, down from a record 38,920 yuan reached on Nov. 11, amid concern that China may take additional steps to curb inflation.
Tight Supply
“Supply remains tight,” Gu Jiong, an analyst at commodity broker Yutaka Shoji Co., said by phone from Tokyo. Rubber was also supported by rallies in other commodities and a weakening Japanese currency, he added.
The cash price in Thailand climbed to a record 132.25 baht ($4.42) per kilogram today as heavy rain and floods in the country’s south damaged trees, tightening supply, according to the Rubber Research Institute of Thailand.
Natural-rubber output in Thailand may decline by 10 percent to 870,000 tons in the fourth quarter, reducing total output this year by 5 percent to 3 million tons, according to an estimate by the Thai Rubber Association.
Applications for unemployment insurance payments rose by 2,000 to 439,000 in the week ended Nov. 13, Labor Department figures showed. Claims were projected to rise to 441,000, according to the median economist estimate in a Bloomberg survey. The total number of people collecting unemployment insurance dropped to the lowest level in two years, while those receiving extended payments climbed.
Manufacturing in the Philadelphia region expanded in November to the highest level this year. The Fed Bank of Philadelphia’s general economic index rose to 22.5 from 1 a month earlier. Readings greater than zero signal expansion. The gauge was forecast to increase to 5, according to the median estimate in a Bloomberg News survey.
(Source: http://www.bloomberg.com/news/2010-11-19/rubber-futures-advance-for-second-day-on-tight-supply-u-s-economic-data.html)
Rubber rallies 3.7 pct on supply concerns
Posted: 19 Nov 2010 03:41 AM PST
Rubber futures rallied on Tokyo Commodity Exchange (TOCOM) on Friday, on expectations Chinamay top off its stocks and on continued supply concerns.
Better-than-expected US data released overnight also helped improve the sentiment for commodities, traders said.
As of 10:30 GMT, the most traded April 2011 contract was at 371.1 yen ($4.45) per kilogram, up 2.7 percent on the day, and 3.3 percent higher from last week's close.
Supplies from Thailand, the world's largest producer of natural rubber, are also reduced by heavy rains and floods affecting the major yielding areas of the country.
Spot price of ribbed smoked sheet (RSS) -3 grade rubber rose by 1.17 baht to 124.30 baht ($4.14) inThailand's Songkhla market on Friday.
Production in India is also severely hit by bad weather in Kerala, a southern state of the country which contributes more than 90 percent of India's total output. India is no.4 producer of the commodity in the world.
US jobless claims rose by 2,000 to 439,000 in the week ended Nov. 13, less than market consensus of 441,000, Labor Department figures showed. The total number of people collecting unemployment insurance dropped to the lowest level in two years, while those receiving extended payments climbed.
Manufacturing in the Philadelphia region expanded in November to the highest level this year. The Fed Bank of Philadelphia's general economic index rose to 22.5 from October, sharply higher than market forecast of 5. Readings above zero signal expansion.
(Source: http://www.ibtimes.com/articles/83785/20101119/rubber-tocom-tokyo-futures-april-contract-thailand-india-kerala-us-data-philadelphia-jobless-claims.htm)
Synthetic rubber use up 26.6% in April-July
Posted: 19 Nov 2010 03:37 AM PST
Reasons: High natural rubber prices, low stock.
The steep rise in natural rubber (NR) prices has resulted in a sharp increase in the consumption of synthetic rubber (SR) in the country. The consumption of SR was up 26.6 per cent during April-July period of the current fiscal year, compared to 4.9 per cent growth in the same period of 2009-10, latest data by the Rubber Board showed.In volume terms, total SR consumption increased to 132,925 tonnes in April-July as against 104,955 tonnes in the same period of the last financial year.
There has been a deviation in the consumption pattern of rubber-based industries in India, especially by tyre manufacturers. A 32.6 per cent increase was recorded in the consumption of SR by tyre companies during the period at 93,503 tonnes against 70,513 tonnes in the same period last year. Though the consumption of NR by tyre producers during the period increased only 5.1 per cent.
With NR prices almost doubling in the last 15 months and poor stock position led to a supply crunch which forced the industry to depend on SR.
More SR was routed to India through imports as domestic production was only 27 per cent of the total requirement. The price advantage of imported SR compared to NR also caused the increase in its consumption.
Certain segments of tyres like car radials especially meant for export purpose need more SR which is preferable in the overseas markets, according to experts. Traditionally Western countries use SR mainly for production of tyres while Asian countries largely use NR.
The consumption ratio of NR and SR in India was 76:24 few years back, which is now 74:26 in favour of SR. There was an improvement in the domestic production of SR. In April-July period, production increased 2.2 per cent while there was negative growth of 4.4 per cent in the same period of the last financial year. Total SR production increased to 35,144 tonnes as against 34,392 tonnes in April -July of 2009-10.
(Source: http://www.business-standard.com/india/news/synthetic-rubber-use266-in-april-july/415365/)
China tightening to weigh on commodities
Posted: 19 Nov 2010 03:32 AM PST
(Reuters) - Steps to curb inflation in China could further dampen a sharp rally in commodity prices this year.
Speculation that a rate move could be just around the corner grew after an official Chinese newspaper suggested that Friday could be a convenient time to raise rates before banks settle accumulated interest on the 20th day of the month, and Chinese Premier Wen Jiabao emphasized that his government is preparing steps to tame price rises.
With inflation running at a 25-month high, raising interest rates or taking measures to cap domestic prices could constrain commodity demand or drain liquidity from markets.
The following scenarios look at what might happen and the potential impact on China's commodity markets.
CHINA RAISES INTEREST RATES AGAIN
The People's Bank of China (PBOC) surprised the world with its October interest rate hike, the first since December 2007. But it did not close the gap between interest rates and inflation and it did not stop a rally in China's commodity futures markets.
Most investors are now asking "when" rather than "whether" interest rates will rise again.
But China runs a risk if it presses the trigger too soon: so far, China has front-loaded its monetary tightening, striking before the market expected it to do so.
Having played one ace, the PBOC may be wary of using another before it needs to, in case speculators flock back to the market, sensing a lull.
Beneath the froth of liquidity, China's fundamental demand for most commodities is expected to stay strong, which would help support underlying prices.
"The government realises they have massive demand that will keep prices under tension. There must be a heightened level of concern after CPI data," ANZ's senior commodity analyst, Mark Pervan, said.
The government has said it aims to increase supplies of commodities and to crack down on hoarding, sending a message that it aims to prevent speculators from exploiting the situation.
Under a tightening scenario, analysts expect markets like rubber and zinc, which have seen significant inflows of speculative money, to fall hard, while markets like copper, which have a more solid fundamentals underpinning them, may hold up better.
Foodstuffs are likely to be hardest hit, highlighting Beijing's focus on consumer inflation.
In recent months, analysts have blamed excess liquidity for pushing up commodity prices across the board, but especially cotton , sugar and rubber .
Rising prices for agricultural commodities such as soybeans , corn and wheat have also prompted farmers to hold onto their crops after the harvest, restricting supply and giving prices another upward push.
The feed-through into food prices, which make up one third the inflation basket, and the risk of civil unrest is likely to be a much bigger concern for policy makers than the danger of boom and bust caused by speculative funds in the market.
CHINA RAISES RRR AGAIN
The PBOC has already tightened banks' balance sheets four times this year by raising their required reserve ratios (RRR). This makes it harder for them to lend but doesn't touch other sources of money supply, such as the revenues from China's trade surplus or the savings that ordinary citizens have squirreled away.
The increases in reserve ratios have had little impact on commodity prices this year after the initial shiver following each tightening move. Many investors have chosen to see such measures as shoring up economic stability rather than worrying about the short-term fall in liquidity and the potential impact on demand.
But even if raising reserve rations has had little impact on commodity prrices, it sends a signal to the market that the government is intent on draining excess liquidity whenever possible.
CHINA DOES NO MORE TIGHTENING BUT KEEPS THE FEAR ALIVE
China's central bank may not need to actually tighten monetary policy. Just talk of a rate rise may be enough to chase off speculators -- for now.
The PBOC has already flipped most economists' forecasts. Before its latest hike on Oct 19, most economists were not expecting any movement on interest rates until 2011. Now many expect another move to come before the end of 2010.
Having created that buzz, the PBOC might even decide to keep its powder dry. Just talk of an impending interest rate rise sent commodity futures tumbling to their daily limits on Nov 12.
Although the rumour proved unfounded, many futures contracts have fallen since then, making it a bigger success in turning around the market than the actual interest rate rise on Oct 19, which barely put a dent in many commodity prices before they continued their upward march.
In the longer term, chasing speculative money out of the agricultural commodity markets could also help bring down food prices, but it risks attracting complaints about the freedom of China's financial markets, a sensitive topic for the government.
(Additional reporting by Nick Trevethan in Singapore)
Spot rubber improves on global cues
Kottayam, Nov. 19
Physical rubber prices flared up on Friday. The market appeared to be bullish following the smart gains in the domestic and international futures. There were no quantity sellers even during the closing hours possibly on supply concerns.
Rubber production in Thailand will fall by about 30,000 tonnes a year for the next six years because of damage from floods, according to official circles. About 16,000 hectares of rubber trees have been destroyed in recent floods and landslides though it represented only about 0.5 per cent of Thailand's rubber area.
According to traders, sheet rubber bounced back to Rs 200 (196) a kg on fresh buying and short-covering.
Futures gain
The December futures for RSS 4 improved to Rs 203.12 (202.02), January to Rs 205.96 (204.86), February to Rs 208.35 (207.84) and March series to Rs 211.69 (210.97) a kg on the National Multi Commodity Exchange. The November futures for RSS-3 moved up to ¥365.5 (Rs 198.86) from ¥358 during the day session and then to ¥373.6 (Rs 203.25) a kg in the night session on the Tokyo Commodity Exchange (TOCOM). Spot rates were (Rs/kg): RSS-4: 200 (196); RSS-5: 188 (185.50); ungraded: 184 (180); ISNR 20: 194 (192) and latex 60 per cent: 130 (130).
Posted: 19 Nov 2010 03:43 AM PST
Rubber climbed for a second day as U.S. jobless claims and manufacturing data boosted optimism that the economic recovery is gathering pace amid tight supply from major producers in Southeast Asia.
April-delivery rubber on the Tokyo Commodity Exchange surged as much as 3.8 percent to 375.9 yen per kilogram ($4,502 a metric ton) before settling at 367.7 yen. The most-active contract has gained 2.1 percent this week and climbed 33 percent this year as heavy rain in Thailand, Indonesia and Malaysia, the top three growers, has disrupted tapping and lowered production.
“Worries over the Irish debt problem have eased and U.S. economic data are supportive, raising optimism demand for the commodity will continue to grow,” Varut Rungkhum, analyst at commodity broker Agro Wealth Ltd., said by phone from Bangkok.
Ireland will probably seek a bailout from the European Union and International Monetary Fund worth “tens of billions” of euros to rescue its battered banks, central bank Governor Patrick Honohan told Irish state broadcaster RTE yesterday. Fewer workers than forecast filed for U.S. jobless benefits, while Philadelphia-area manufacturing topped estimates.
May-delivery rubber on the Shanghai Futures Exchange gained by the daily 5 percent limit to 34,415 yuan ($5,185) a ton and closed at that level. The contract has lost 3.8 percent this week, down from a record 38,920 yuan reached on Nov. 11, amid concern that China may take additional steps to curb inflation.
Tight Supply
“Supply remains tight,” Gu Jiong, an analyst at commodity broker Yutaka Shoji Co., said by phone from Tokyo. Rubber was also supported by rallies in other commodities and a weakening Japanese currency, he added.
The cash price in Thailand climbed to a record 132.25 baht ($4.42) per kilogram today as heavy rain and floods in the country’s south damaged trees, tightening supply, according to the Rubber Research Institute of Thailand.
Natural-rubber output in Thailand may decline by 10 percent to 870,000 tons in the fourth quarter, reducing total output this year by 5 percent to 3 million tons, according to an estimate by the Thai Rubber Association.
Applications for unemployment insurance payments rose by 2,000 to 439,000 in the week ended Nov. 13, Labor Department figures showed. Claims were projected to rise to 441,000, according to the median economist estimate in a Bloomberg survey. The total number of people collecting unemployment insurance dropped to the lowest level in two years, while those receiving extended payments climbed.
Manufacturing in the Philadelphia region expanded in November to the highest level this year. The Fed Bank of Philadelphia’s general economic index rose to 22.5 from 1 a month earlier. Readings greater than zero signal expansion. The gauge was forecast to increase to 5, according to the median estimate in a Bloomberg News survey.
(Source: http://www.bloomberg.com/news/2010-11-19/rubber-futures-advance-for-second-day-on-tight-supply-u-s-economic-data.html)
Rubber rallies 3.7 pct on supply concerns
Posted: 19 Nov 2010 03:41 AM PST
Rubber futures rallied on Tokyo Commodity Exchange (TOCOM) on Friday, on expectations Chinamay top off its stocks and on continued supply concerns.
Better-than-expected US data released overnight also helped improve the sentiment for commodities, traders said.
As of 10:30 GMT, the most traded April 2011 contract was at 371.1 yen ($4.45) per kilogram, up 2.7 percent on the day, and 3.3 percent higher from last week's close.
Supplies from Thailand, the world's largest producer of natural rubber, are also reduced by heavy rains and floods affecting the major yielding areas of the country.
Spot price of ribbed smoked sheet (RSS) -3 grade rubber rose by 1.17 baht to 124.30 baht ($4.14) inThailand's Songkhla market on Friday.
Production in India is also severely hit by bad weather in Kerala, a southern state of the country which contributes more than 90 percent of India's total output. India is no.4 producer of the commodity in the world.
US jobless claims rose by 2,000 to 439,000 in the week ended Nov. 13, less than market consensus of 441,000, Labor Department figures showed. The total number of people collecting unemployment insurance dropped to the lowest level in two years, while those receiving extended payments climbed.
Manufacturing in the Philadelphia region expanded in November to the highest level this year. The Fed Bank of Philadelphia's general economic index rose to 22.5 from October, sharply higher than market forecast of 5. Readings above zero signal expansion.
(Source: http://www.ibtimes.com/articles/83785/20101119/rubber-tocom-tokyo-futures-april-contract-thailand-india-kerala-us-data-philadelphia-jobless-claims.htm)
Synthetic rubber use up 26.6% in April-July
Posted: 19 Nov 2010 03:37 AM PST
Reasons: High natural rubber prices, low stock.
The steep rise in natural rubber (NR) prices has resulted in a sharp increase in the consumption of synthetic rubber (SR) in the country. The consumption of SR was up 26.6 per cent during April-July period of the current fiscal year, compared to 4.9 per cent growth in the same period of 2009-10, latest data by the Rubber Board showed.In volume terms, total SR consumption increased to 132,925 tonnes in April-July as against 104,955 tonnes in the same period of the last financial year.
There has been a deviation in the consumption pattern of rubber-based industries in India, especially by tyre manufacturers. A 32.6 per cent increase was recorded in the consumption of SR by tyre companies during the period at 93,503 tonnes against 70,513 tonnes in the same period last year. Though the consumption of NR by tyre producers during the period increased only 5.1 per cent.
With NR prices almost doubling in the last 15 months and poor stock position led to a supply crunch which forced the industry to depend on SR.
More SR was routed to India through imports as domestic production was only 27 per cent of the total requirement. The price advantage of imported SR compared to NR also caused the increase in its consumption.
Certain segments of tyres like car radials especially meant for export purpose need more SR which is preferable in the overseas markets, according to experts. Traditionally Western countries use SR mainly for production of tyres while Asian countries largely use NR.
The consumption ratio of NR and SR in India was 76:24 few years back, which is now 74:26 in favour of SR. There was an improvement in the domestic production of SR. In April-July period, production increased 2.2 per cent while there was negative growth of 4.4 per cent in the same period of the last financial year. Total SR production increased to 35,144 tonnes as against 34,392 tonnes in April -July of 2009-10.
(Source: http://www.business-standard.com/india/news/synthetic-rubber-use266-in-april-july/415365/)
China tightening to weigh on commodities
Posted: 19 Nov 2010 03:32 AM PST
(Reuters) - Steps to curb inflation in China could further dampen a sharp rally in commodity prices this year.
Speculation that a rate move could be just around the corner grew after an official Chinese newspaper suggested that Friday could be a convenient time to raise rates before banks settle accumulated interest on the 20th day of the month, and Chinese Premier Wen Jiabao emphasized that his government is preparing steps to tame price rises.
With inflation running at a 25-month high, raising interest rates or taking measures to cap domestic prices could constrain commodity demand or drain liquidity from markets.
The following scenarios look at what might happen and the potential impact on China's commodity markets.
CHINA RAISES INTEREST RATES AGAIN
The People's Bank of China (PBOC) surprised the world with its October interest rate hike, the first since December 2007. But it did not close the gap between interest rates and inflation and it did not stop a rally in China's commodity futures markets.
Most investors are now asking "when" rather than "whether" interest rates will rise again.
But China runs a risk if it presses the trigger too soon: so far, China has front-loaded its monetary tightening, striking before the market expected it to do so.
Having played one ace, the PBOC may be wary of using another before it needs to, in case speculators flock back to the market, sensing a lull.
Beneath the froth of liquidity, China's fundamental demand for most commodities is expected to stay strong, which would help support underlying prices.
"The government realises they have massive demand that will keep prices under tension. There must be a heightened level of concern after CPI data," ANZ's senior commodity analyst, Mark Pervan, said.
The government has said it aims to increase supplies of commodities and to crack down on hoarding, sending a message that it aims to prevent speculators from exploiting the situation.
Under a tightening scenario, analysts expect markets like rubber and zinc, which have seen significant inflows of speculative money, to fall hard, while markets like copper, which have a more solid fundamentals underpinning them, may hold up better.
Foodstuffs are likely to be hardest hit, highlighting Beijing's focus on consumer inflation.
In recent months, analysts have blamed excess liquidity for pushing up commodity prices across the board, but especially cotton , sugar and rubber .
Rising prices for agricultural commodities such as soybeans , corn and wheat have also prompted farmers to hold onto their crops after the harvest, restricting supply and giving prices another upward push.
The feed-through into food prices, which make up one third the inflation basket, and the risk of civil unrest is likely to be a much bigger concern for policy makers than the danger of boom and bust caused by speculative funds in the market.
CHINA RAISES RRR AGAIN
The PBOC has already tightened banks' balance sheets four times this year by raising their required reserve ratios (RRR). This makes it harder for them to lend but doesn't touch other sources of money supply, such as the revenues from China's trade surplus or the savings that ordinary citizens have squirreled away.
The increases in reserve ratios have had little impact on commodity prices this year after the initial shiver following each tightening move. Many investors have chosen to see such measures as shoring up economic stability rather than worrying about the short-term fall in liquidity and the potential impact on demand.
But even if raising reserve rations has had little impact on commodity prrices, it sends a signal to the market that the government is intent on draining excess liquidity whenever possible.
CHINA DOES NO MORE TIGHTENING BUT KEEPS THE FEAR ALIVE
China's central bank may not need to actually tighten monetary policy. Just talk of a rate rise may be enough to chase off speculators -- for now.
The PBOC has already flipped most economists' forecasts. Before its latest hike on Oct 19, most economists were not expecting any movement on interest rates until 2011. Now many expect another move to come before the end of 2010.
Having created that buzz, the PBOC might even decide to keep its powder dry. Just talk of an impending interest rate rise sent commodity futures tumbling to their daily limits on Nov 12.
Although the rumour proved unfounded, many futures contracts have fallen since then, making it a bigger success in turning around the market than the actual interest rate rise on Oct 19, which barely put a dent in many commodity prices before they continued their upward march.
In the longer term, chasing speculative money out of the agricultural commodity markets could also help bring down food prices, but it risks attracting complaints about the freedom of China's financial markets, a sensitive topic for the government.
(Additional reporting by Nick Trevethan in Singapore)
Spot rubber improves on global cues
Kottayam, Nov. 19
Physical rubber prices flared up on Friday. The market appeared to be bullish following the smart gains in the domestic and international futures. There were no quantity sellers even during the closing hours possibly on supply concerns.
Rubber production in Thailand will fall by about 30,000 tonnes a year for the next six years because of damage from floods, according to official circles. About 16,000 hectares of rubber trees have been destroyed in recent floods and landslides though it represented only about 0.5 per cent of Thailand's rubber area.
According to traders, sheet rubber bounced back to Rs 200 (196) a kg on fresh buying and short-covering.
Futures gain
The December futures for RSS 4 improved to Rs 203.12 (202.02), January to Rs 205.96 (204.86), February to Rs 208.35 (207.84) and March series to Rs 211.69 (210.97) a kg on the National Multi Commodity Exchange. The November futures for RSS-3 moved up to ¥365.5 (Rs 198.86) from ¥358 during the day session and then to ¥373.6 (Rs 203.25) a kg in the night session on the Tokyo Commodity Exchange (TOCOM). Spot rates were (Rs/kg): RSS-4: 200 (196); RSS-5: 188 (185.50); ungraded: 184 (180); ISNR 20: 194 (192) and latex 60 per cent: 130 (130).
Friday, November 19, 2010
Rubber shoots up
Rubber shoots up
Kottayam, Nov. 18
Spot rubber showed a up trend on Thursday. The undercurrent was firm following gains in the domestic and international futures but most grades remained unchanged as traders were reluctant to expand their commitments towards the weekend. The market continued to suffer from short supplies as widespread rains disrupted tapping in almost all major plantation areas.
Sheet rubber improved to Rs 196 (195) a kg according to traders. The grade closed firm at Rs 195.50 (195) a kg both at Kottayam and Kochi as reported by the Rubber Board.
Futures gain
The December series flared up to Rs 202.40 (196.87), January to Rs 204.80 (198.84) and February to Rs 207.90 (202.94) and March series to Rs 211 (205.82) a kg for RSS 4 on the National Multi Commodity Exchange.
RSS 3 bounced back at its November futures to ¥358 (Rs 194.77) from ¥348.4 a kg during the day session and then to ¥361.9 (Rs 196.92) in the night session on the Tokyo Commodity Exchange. The grade (spot) weakened to Rs 196.30 (197.24) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 196 (195); RSS-5: 185.50 (185); ungraded: 180 (180); ISNR 20: 192 (192) and latex 60 per cent: 130 (130).
China vows to tame inflation
Posted: 18 Nov 2010 03:59 AM PST
(Reuters) - China will intervene to control consumer prices if they rise too quickly, the government said on Wednesday, a move that will do little by itself to tame inflation but could foreshadow harsher monetary tightening.
Steps to cool demand in China, the world's fastest-growing major economy, could weigh on global markets at a time when recoveries in Europe and the United States remain fragile.
To begin with, the State Council, or cabinet, said it would aim to increase the supply of commodities, especially food, that have driven inflation to a 25-month high, while also clamping down on speculative demand that has lifted prices higher.
"We need to understand the importance and urgency of stabilising market prices and take forceful measures," it said after a routine meeting chaired by Premier Wen Jiabao.
"When necessary, temporary intervention measures will be implemented on prices of some important daily necessities and production materials," it added in the statement.
The State Council singled out grain, oil, sugar and cotton as markets that it wanted to stabilise. It also vowed to intensify a crackdown on price speculation and to punish those found hoarding commodities and pushing up prices by illegal means.
The statement made no mention of monetary policy.
"I don't believe that they will just stop here," said Kevin Lai, an economist with Daiwa Capital Markets. "Many people in the government are capable enough to figure out that prices controls are not that effective."
"They really have to do something more about controlling liquidity and money supply growth if they are serious about containing inflation," Lai said, adding that he expected the central bank to raise interest rates for the second time this year over the next two weeks.
MORE TIGHTENING AHEAD
Worries that the government could start tightening more aggressively drove China's main stock index down by 1.9 percent on Wednesday to a one-month closing low. The index has dropped 11 percent over the past four trading days.
Shi Chenyu, an economist with the investment banking arm of the Industrial and Commercial Bank of China, said the sternly worded statement showed that inflation had reached the top of Beijing's policy agenda.
"The government often opts for iron-fisted administrative measures to control prices when inflation becomes a serious problem," Shi said. "However, harsh administrative measures may backfire as expectations of further price rises may intensify."
The State Council said it would hold provincial governors accountable for the prices of "rice bags" and make mayors responsible for "vegetable baskets," though it did not specify how it would implement these directives.
The world's major consumer of farm commodities including cotton, corn and sugar, China has been releasing state reserves this year but has failed to cool record domestic prices.
Sudakshina Unnikrishnan, a commodities analyst at Barclays Capital in London, said China was expected to release further reserves of commodities such as sugar, but could step up import demand, fuelling upward pressure on international prices.
"While such measures would cool domestic prices in the near term, the international markets are tight," she said.
"If the Chinese reduce domestic reserves, they will have to increase domestic reserves later, so Chinese demand on international markets will increase." Other analysts predicted the government's statement would have little long-term impact on commodities prices, which have been rising sharply in China in recent months.
"Agricultural commodities price falls are likely to be moderate and regain upward strength if there aren't concrete measures such as tightening liquidity," said Lu Yun, an analyst with Shanghai JCI.
"There is nothing new in the statement, and the market has already anticipated such adjustment," added Lu.
Even if the government sold all its estimated 1 million tonnes of state sugar reserves, the market could soon digest it, said Liu Qiang, an analyst with Guohai Liangshi Futures Co.
GOOD FOR FARMERS
Apart from doubts about the effectiveness of price controls, Beijing may be reluctant to press down too heavily because more expensive food also supports one of its core policy objectives.
"The government has always said it wants to raise farmers' incomes and rising prices are a good way of achieving that," said Zhang Hanya, a researcher with the National Development and Reform Commission (NDRC), a powerful planning agency.
Instead of targeting food prices, the government should use part of its hefty revenues to subsidise city dwellers, he said.
Consumer inflation sped to a 25-month high in October, with prices rising 4.4 percent from a year earlier. Food, which makes up about a third of China's consumer price index, led the way, climbing 10.1 percent. Non-food items rose just 1.6 percent.
Unlike past bouts of food inflation in China, there have been no major droughts or diseases to stoke prices this year. Instead, fast money growth appears to be the primary culprit.
To that end, reports in the Chinese press on Wednesday pointed to interest rate increases, higher reserve requirements and more restrictions on bank lending as weapons in the government's arsenal against inflation.
Many economists also believe China will quicken the pace of yuan appreciation as inflation accelerates, because this would help to reduce the cost of imported goods.
China's futures prices for cotton, sugar and rubber have spiked in recent weeks, with analysts blaming excessive liquidity, supply disruptions, strengthening demand and a growing investor appetite for safe-haven assets.
A spike in demand for diesel-fired power generation has caused a supply shortage that could last into 2011, forcing Chinese refineries to import the fuel for the first time in nearly two years.
(Source: http://uk.reuters.com/article/idUKTRE6AH0AY20101118)
Apollo Tyres to up prices, rubber imports
Posted: 18 Nov 2010 03:54 AM PST
New Delhi: Apollo Tyres Ltd will have to raise prices by as much as 15-20% to sustain margins on record high rubber prices, a top official said on Thursday. “The situation looks challenging. Price increases are definitely inevitable, given the pressure we are facing on raw materials,” Sunam Sarkar, chief financial officer, told Reuters in an interview.
Indian tyremakers have been forced to buy rubber at record-high prices, as unseasonal rains tightened supply in the world’s fourth biggest producer.
The No. 2 Indian tyre maker is still deciding on a timeline to implement price raises, Sarkar said by phone.
Rubber prices make up over 40% of the cost of a tyre. The company will also have to increase imports at higher costs as domestic supply is not meeting demand, Sarkar said.
“Just out of sheer availability concern, we will have to import more rubber, because there is not enough available in the country today.”
Apollo imported 15000 tonnes of rubber in July-Sept.
India is in the midst of an auto boom. Car sales in India rose an annual 38% in October to record levels, as festive season demand combined with the rapidly expanding economy to pull buyers into showrooms.
But, leading tyre makers like MRF, JK Tyre & Indusries, Ceat Dunlop India and Falcon Tyres are also expected to go for another round of price hike soon to meet their cost for rubber.
Tyremakers have already raised prices at least thrice this year, as rubber prices jumped 46% to 203 rupees per kilogram since 1 January, 2010.
JK Tyre and Ceat have also posted lower profit for July-Sept despite the surge in auto market, struggling to sustain margins.
“We do not really have the margins to play around with. We are not like the software industry, where you have 30% or 40% margins,” Sarkar said.
Apollo’s Europe operations have better margins than the domestic operations, and the company plans to raise capacity on the continent by 20%, Sarkar said.
Earlier on Thursday, Apollo’s July-Sept profits slumped 59% to Rs. Rs. 53.22 crore, though sales saw a more modest paring to Rs. 1, 950 crore.
Shares of the Gurgaon-based company the market values at over $855 million, fell as much as 7% to Rs. 69.80 by 2:30 p.m. in a Mumbai market that was down more than 1%.
(Source: http://www.livemint.com/2010/11/11160826/Apollo-Tyres-to-up-prices-rub.html?h=B)
The Rubber Market Was Jittery After The Emergence Of High Inflation In China
Posted: 17 Nov 2010 07:04 PM PST
Shanghai and Tokyo rubber futures continued to retreat for a second consecutive day on Monday as investors and speculators unwound their long positions for profit-taking before both markets would settled mixed on Tuesday. At the same time, IRCo’s DCP and cash prices moved in tandem with the price movement on rubber futures.
It is expected that a 4.4% rise in the October inflation rate in China, a measure to control inflows of foreign money from elsewhere to China and a tighter lending policy by its central bank have signaled Chinese leaders to be wary of leading the Chinese economy into the brink of higher inflation and social violence in the country. In addition, a rise in both Ireland’s banks and its public debts may paralyze the European economy if euro zone members cannot agree on a package of aid for Ireland in time.
Furthermore, the U.S. Federal Reserve Bank of New York has started buying US$5.419 billion in Treasury bonds on Tuesday, according to a report by WSJ on 17 November 2010, this will lend support for the greenback to continue strengthening against the euro and the Japanese yen in coming days and it is one of many factors that can weaken crude oil futures and other commodity prices, including rubber futures. However, a weakening Japanese yen will raise yen-nominated prices on Tokyo rubber futures.
(Source: http://www.irco.biz/BlogMoreDetial.php?id=2711&ShowContent=news%20&PHPSESSID=734b7f0627235560d7590ba796b6afb6)
Hot Money, Bad Weather to Keep Rubber Prices High Into 2011
Posted: 17 Nov 2010 07:00 PM PST
Natural rubber prices have nearly tripled from the lows seen during the global financial crisis, but that is unlikely to lead to a reversal in the market as below-trend production and rising demand will continue to support prices around the current levels, industry participants said Tuesday.
This could leave major consumers such as tire makers with few options other than passing on some of the rising costs to end consumers to maintain profitability.
The market is "likely to stay high into the second quarter of 2011; it would be difficult for prices to come down below $3/kilogram," said Yium Tavarolit, chief secretary of the International Rubber Consortium, a grouping of key producers in Southeast Asia.
Yium had earlier predicted natural rubber would hit $4/kg by the first quarter of 2011, but current prices are already well above that level, as a recent rally in the futures markets took prices on the Tokyo Commodity Exchange to Y383/kg last week, a level not seen since 1980. That was a 280% increase from December 2008 when the market briefly slipped below the Y100/kg-mark amid the global economic downturn.
Prices have come off a bit since then, but many see this as a necessary correction as the market was heavily over-bought. On Tuesday, the benchmark April contract on the Tocom settled Y4.6 or 1.3% higher at Y358.3/kg.
Tocom prices have limited downside from here, as the Y350/kg level is generally acceptable to most buyers, said Kaname Gokon, deputy general manager in Japanese brokerage Okato Shoji Co's research section. The brokerage is one of the top 10 trading members in Tocom rubber, in terms of volumes traded.
By all accounts, both fundamentals and speculative factors are supportive, with forecasts for 2010 prices well above $3/kg.
Underpinning the strength in the market this year is the weather, which has been persistently unfavorable, with the El Nino first and La Nina later, contributing to lower production throughout the year in major producing countries such as Thailand, Indonesia and Malaysia. The three countries together account for about 70% of the global supply.
The supply crunch is unlikely to ease anytime soon as it won't be long before major producing regions enter the dry wintering season around February when trees shed leaves and production falls.
That, coupled with the excess liquidity unleashed by the latest round of quantitative easing measures by the U.S. Federal Reserve, will continue support prices till the second quarter of 2011, added Yium.
Some consumers such as tire companies have already passed on some of the rising costs to end-buyers, as demand for new and replacement tires has been firm, with any softening seen as limited.
There may be little comfort on the supply front even in the medium term as at least 20,000 hectares of Thai plantations have been affected by recent flooding and storms, possibly reducing production further.
As a short-term response, plantation owners have been postponing their replanting programs this year to keep the estates in production while prices remain high, said Thai Rubber Association President Luckchai Kittipol.
"Obviously, the deficit would be greater than anticipated; the recent supply problems were unexpected and have pushed up prices more than expected," said Prachaya Jumpasut, the UK-based Managing director of The Rubber Economist and a former head of Economics and Statistics at the International Rubber Study Group.
(Source: http://www.irco.biz/BlogMoreDetial.php?id=2710&ShowContent=news%20&PHPSESSID=734b7f0627235560d7590ba796b6afb6)
Kottayam, Nov. 18
Spot rubber showed a up trend on Thursday. The undercurrent was firm following gains in the domestic and international futures but most grades remained unchanged as traders were reluctant to expand their commitments towards the weekend. The market continued to suffer from short supplies as widespread rains disrupted tapping in almost all major plantation areas.
Sheet rubber improved to Rs 196 (195) a kg according to traders. The grade closed firm at Rs 195.50 (195) a kg both at Kottayam and Kochi as reported by the Rubber Board.
Futures gain
The December series flared up to Rs 202.40 (196.87), January to Rs 204.80 (198.84) and February to Rs 207.90 (202.94) and March series to Rs 211 (205.82) a kg for RSS 4 on the National Multi Commodity Exchange.
RSS 3 bounced back at its November futures to ¥358 (Rs 194.77) from ¥348.4 a kg during the day session and then to ¥361.9 (Rs 196.92) in the night session on the Tokyo Commodity Exchange. The grade (spot) weakened to Rs 196.30 (197.24) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 196 (195); RSS-5: 185.50 (185); ungraded: 180 (180); ISNR 20: 192 (192) and latex 60 per cent: 130 (130).
China vows to tame inflation
Posted: 18 Nov 2010 03:59 AM PST
(Reuters) - China will intervene to control consumer prices if they rise too quickly, the government said on Wednesday, a move that will do little by itself to tame inflation but could foreshadow harsher monetary tightening.
Steps to cool demand in China, the world's fastest-growing major economy, could weigh on global markets at a time when recoveries in Europe and the United States remain fragile.
To begin with, the State Council, or cabinet, said it would aim to increase the supply of commodities, especially food, that have driven inflation to a 25-month high, while also clamping down on speculative demand that has lifted prices higher.
"We need to understand the importance and urgency of stabilising market prices and take forceful measures," it said after a routine meeting chaired by Premier Wen Jiabao.
"When necessary, temporary intervention measures will be implemented on prices of some important daily necessities and production materials," it added in the statement.
The State Council singled out grain, oil, sugar and cotton as markets that it wanted to stabilise. It also vowed to intensify a crackdown on price speculation and to punish those found hoarding commodities and pushing up prices by illegal means.
The statement made no mention of monetary policy.
"I don't believe that they will just stop here," said Kevin Lai, an economist with Daiwa Capital Markets. "Many people in the government are capable enough to figure out that prices controls are not that effective."
"They really have to do something more about controlling liquidity and money supply growth if they are serious about containing inflation," Lai said, adding that he expected the central bank to raise interest rates for the second time this year over the next two weeks.
MORE TIGHTENING AHEAD
Worries that the government could start tightening more aggressively drove China's main stock index down by 1.9 percent on Wednesday to a one-month closing low. The index has dropped 11 percent over the past four trading days.
Shi Chenyu, an economist with the investment banking arm of the Industrial and Commercial Bank of China, said the sternly worded statement showed that inflation had reached the top of Beijing's policy agenda.
"The government often opts for iron-fisted administrative measures to control prices when inflation becomes a serious problem," Shi said. "However, harsh administrative measures may backfire as expectations of further price rises may intensify."
The State Council said it would hold provincial governors accountable for the prices of "rice bags" and make mayors responsible for "vegetable baskets," though it did not specify how it would implement these directives.
The world's major consumer of farm commodities including cotton, corn and sugar, China has been releasing state reserves this year but has failed to cool record domestic prices.
Sudakshina Unnikrishnan, a commodities analyst at Barclays Capital in London, said China was expected to release further reserves of commodities such as sugar, but could step up import demand, fuelling upward pressure on international prices.
"While such measures would cool domestic prices in the near term, the international markets are tight," she said.
"If the Chinese reduce domestic reserves, they will have to increase domestic reserves later, so Chinese demand on international markets will increase." Other analysts predicted the government's statement would have little long-term impact on commodities prices, which have been rising sharply in China in recent months.
"Agricultural commodities price falls are likely to be moderate and regain upward strength if there aren't concrete measures such as tightening liquidity," said Lu Yun, an analyst with Shanghai JCI.
"There is nothing new in the statement, and the market has already anticipated such adjustment," added Lu.
Even if the government sold all its estimated 1 million tonnes of state sugar reserves, the market could soon digest it, said Liu Qiang, an analyst with Guohai Liangshi Futures Co.
GOOD FOR FARMERS
Apart from doubts about the effectiveness of price controls, Beijing may be reluctant to press down too heavily because more expensive food also supports one of its core policy objectives.
"The government has always said it wants to raise farmers' incomes and rising prices are a good way of achieving that," said Zhang Hanya, a researcher with the National Development and Reform Commission (NDRC), a powerful planning agency.
Instead of targeting food prices, the government should use part of its hefty revenues to subsidise city dwellers, he said.
Consumer inflation sped to a 25-month high in October, with prices rising 4.4 percent from a year earlier. Food, which makes up about a third of China's consumer price index, led the way, climbing 10.1 percent. Non-food items rose just 1.6 percent.
Unlike past bouts of food inflation in China, there have been no major droughts or diseases to stoke prices this year. Instead, fast money growth appears to be the primary culprit.
To that end, reports in the Chinese press on Wednesday pointed to interest rate increases, higher reserve requirements and more restrictions on bank lending as weapons in the government's arsenal against inflation.
Many economists also believe China will quicken the pace of yuan appreciation as inflation accelerates, because this would help to reduce the cost of imported goods.
China's futures prices for cotton, sugar and rubber have spiked in recent weeks, with analysts blaming excessive liquidity, supply disruptions, strengthening demand and a growing investor appetite for safe-haven assets.
A spike in demand for diesel-fired power generation has caused a supply shortage that could last into 2011, forcing Chinese refineries to import the fuel for the first time in nearly two years.
(Source: http://uk.reuters.com/article/idUKTRE6AH0AY20101118)
Apollo Tyres to up prices, rubber imports
Posted: 18 Nov 2010 03:54 AM PST
New Delhi: Apollo Tyres Ltd will have to raise prices by as much as 15-20% to sustain margins on record high rubber prices, a top official said on Thursday. “The situation looks challenging. Price increases are definitely inevitable, given the pressure we are facing on raw materials,” Sunam Sarkar, chief financial officer, told Reuters in an interview.
Indian tyremakers have been forced to buy rubber at record-high prices, as unseasonal rains tightened supply in the world’s fourth biggest producer.
The No. 2 Indian tyre maker is still deciding on a timeline to implement price raises, Sarkar said by phone.
Rubber prices make up over 40% of the cost of a tyre. The company will also have to increase imports at higher costs as domestic supply is not meeting demand, Sarkar said.
“Just out of sheer availability concern, we will have to import more rubber, because there is not enough available in the country today.”
Apollo imported 15000 tonnes of rubber in July-Sept.
India is in the midst of an auto boom. Car sales in India rose an annual 38% in October to record levels, as festive season demand combined with the rapidly expanding economy to pull buyers into showrooms.
But, leading tyre makers like MRF, JK Tyre & Indusries, Ceat Dunlop India and Falcon Tyres are also expected to go for another round of price hike soon to meet their cost for rubber.
Tyremakers have already raised prices at least thrice this year, as rubber prices jumped 46% to 203 rupees per kilogram since 1 January, 2010.
JK Tyre and Ceat have also posted lower profit for July-Sept despite the surge in auto market, struggling to sustain margins.
“We do not really have the margins to play around with. We are not like the software industry, where you have 30% or 40% margins,” Sarkar said.
Apollo’s Europe operations have better margins than the domestic operations, and the company plans to raise capacity on the continent by 20%, Sarkar said.
Earlier on Thursday, Apollo’s July-Sept profits slumped 59% to Rs. Rs. 53.22 crore, though sales saw a more modest paring to Rs. 1, 950 crore.
Shares of the Gurgaon-based company the market values at over $855 million, fell as much as 7% to Rs. 69.80 by 2:30 p.m. in a Mumbai market that was down more than 1%.
(Source: http://www.livemint.com/2010/11/11160826/Apollo-Tyres-to-up-prices-rub.html?h=B)
The Rubber Market Was Jittery After The Emergence Of High Inflation In China
Posted: 17 Nov 2010 07:04 PM PST
Shanghai and Tokyo rubber futures continued to retreat for a second consecutive day on Monday as investors and speculators unwound their long positions for profit-taking before both markets would settled mixed on Tuesday. At the same time, IRCo’s DCP and cash prices moved in tandem with the price movement on rubber futures.
It is expected that a 4.4% rise in the October inflation rate in China, a measure to control inflows of foreign money from elsewhere to China and a tighter lending policy by its central bank have signaled Chinese leaders to be wary of leading the Chinese economy into the brink of higher inflation and social violence in the country. In addition, a rise in both Ireland’s banks and its public debts may paralyze the European economy if euro zone members cannot agree on a package of aid for Ireland in time.
Furthermore, the U.S. Federal Reserve Bank of New York has started buying US$5.419 billion in Treasury bonds on Tuesday, according to a report by WSJ on 17 November 2010, this will lend support for the greenback to continue strengthening against the euro and the Japanese yen in coming days and it is one of many factors that can weaken crude oil futures and other commodity prices, including rubber futures. However, a weakening Japanese yen will raise yen-nominated prices on Tokyo rubber futures.
(Source: http://www.irco.biz/BlogMoreDetial.php?id=2711&ShowContent=news%20&PHPSESSID=734b7f0627235560d7590ba796b6afb6)
Hot Money, Bad Weather to Keep Rubber Prices High Into 2011
Posted: 17 Nov 2010 07:00 PM PST
Natural rubber prices have nearly tripled from the lows seen during the global financial crisis, but that is unlikely to lead to a reversal in the market as below-trend production and rising demand will continue to support prices around the current levels, industry participants said Tuesday.
This could leave major consumers such as tire makers with few options other than passing on some of the rising costs to end consumers to maintain profitability.
The market is "likely to stay high into the second quarter of 2011; it would be difficult for prices to come down below $3/kilogram," said Yium Tavarolit, chief secretary of the International Rubber Consortium, a grouping of key producers in Southeast Asia.
Yium had earlier predicted natural rubber would hit $4/kg by the first quarter of 2011, but current prices are already well above that level, as a recent rally in the futures markets took prices on the Tokyo Commodity Exchange to Y383/kg last week, a level not seen since 1980. That was a 280% increase from December 2008 when the market briefly slipped below the Y100/kg-mark amid the global economic downturn.
Prices have come off a bit since then, but many see this as a necessary correction as the market was heavily over-bought. On Tuesday, the benchmark April contract on the Tocom settled Y4.6 or 1.3% higher at Y358.3/kg.
Tocom prices have limited downside from here, as the Y350/kg level is generally acceptable to most buyers, said Kaname Gokon, deputy general manager in Japanese brokerage Okato Shoji Co's research section. The brokerage is one of the top 10 trading members in Tocom rubber, in terms of volumes traded.
By all accounts, both fundamentals and speculative factors are supportive, with forecasts for 2010 prices well above $3/kg.
Underpinning the strength in the market this year is the weather, which has been persistently unfavorable, with the El Nino first and La Nina later, contributing to lower production throughout the year in major producing countries such as Thailand, Indonesia and Malaysia. The three countries together account for about 70% of the global supply.
The supply crunch is unlikely to ease anytime soon as it won't be long before major producing regions enter the dry wintering season around February when trees shed leaves and production falls.
That, coupled with the excess liquidity unleashed by the latest round of quantitative easing measures by the U.S. Federal Reserve, will continue support prices till the second quarter of 2011, added Yium.
Some consumers such as tire companies have already passed on some of the rising costs to end-buyers, as demand for new and replacement tires has been firm, with any softening seen as limited.
There may be little comfort on the supply front even in the medium term as at least 20,000 hectares of Thai plantations have been affected by recent flooding and storms, possibly reducing production further.
As a short-term response, plantation owners have been postponing their replanting programs this year to keep the estates in production while prices remain high, said Thai Rubber Association President Luckchai Kittipol.
"Obviously, the deficit would be greater than anticipated; the recent supply problems were unexpected and have pushed up prices more than expected," said Prachaya Jumpasut, the UK-based Managing director of The Rubber Economist and a former head of Economics and Statistics at the International Rubber Study Group.
(Source: http://www.irco.biz/BlogMoreDetial.php?id=2710&ShowContent=news%20&PHPSESSID=734b7f0627235560d7590ba796b6afb6)
Thursday, November 18, 2010
Spot rubber declines on global cues
Spot rubber declines on global cues
Kottayam, Nov. 17
Spot rubber declined on Wednesday on a holiday mood in the market and the prices fell amidst scattered transactions. A weak closing in the international markets kept the prices under pressure on late trades. Most of the traders were inactive and National Multi Commodity Exchange remained closed owing to Eid.
According to dealers, sheet rubber weakened to Rs 195 (197) a kg mainly on buyer resistance. The grade closed at Rs 195 (197.50) a kg both at Kottayam and Kochi according to Rubber Board. RSS 3 declined at its November futures to ¥348.4 (Rs 189.37) from ¥357.3 a kg during the day session and then to ¥346.9 (Rs 188.55) in the night session on the Tokyo Commodity Exchange . The grade (spot) slipped to Rs 197.24 (197.74) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 195 (197); RSS-5: 185 (187); ungraded: 180 (184); ISNR 20: 192 (193) and latex 60 per cent: 130 (130).
Kottayam, Nov. 17
Spot rubber declined on Wednesday on a holiday mood in the market and the prices fell amidst scattered transactions. A weak closing in the international markets kept the prices under pressure on late trades. Most of the traders were inactive and National Multi Commodity Exchange remained closed owing to Eid.
According to dealers, sheet rubber weakened to Rs 195 (197) a kg mainly on buyer resistance. The grade closed at Rs 195 (197.50) a kg both at Kottayam and Kochi according to Rubber Board. RSS 3 declined at its November futures to ¥348.4 (Rs 189.37) from ¥357.3 a kg during the day session and then to ¥346.9 (Rs 188.55) in the night session on the Tokyo Commodity Exchange . The grade (spot) slipped to Rs 197.24 (197.74) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 195 (197); RSS-5: 185 (187); ungraded: 180 (184); ISNR 20: 192 (193) and latex 60 per cent: 130 (130).
Wednesday, November 17, 2010
Mixed trend in rubber
Mixed trend in rubber
Kottayam, Nov. 16
Physical rubber prices saw a mixed trend on Tuesday. The undercurrent was weak following the declines on the National Multi Commodity Exchange (NMCE). There was no selling pressure in the market as widespread rains reported from the plantation areas had created supply fears. According to sources, major grades slipped on buyer resistance while ungraded rubber improved on comparatively better demand.
Among other news, China's total rubber consumption this year is estimated to reach 6.45 million tonnes, up by 9.7 per cent compared with last year, the China Rubber Industry Association said. Of this, natural rubber consumption is expected to rise 3.7 per cent to 2.8 million tonnes, while synthetic rubber consumption is forecast to rise 14.8 per cent to 3.65 million tonnes.
Sheet rubber weakened to Rs 197 (198) a kg in the main marketing centres. The grade moved down to Rs 197.50 (198) a kg both at Kottayam and Kochi according to Rubber Board. The transactions were in a low key.
Futures weak
In futures, the December series weakened to Rs 196.75 (200.18), January to Rs 198.62 (202.18) and February to Rs 202.60 (205.38) while the March series finished the debut trading session at Rs 205.61 a kg for RSS 4 on the NMCE. RSS 3 improved at with November futures risign to ¥357.3 (Rs 194.18) from ¥351 a kg during the day session and then slipped to ¥350 (Rs 190.21) in the night session on the Tokyo Commodity Exchange. The grade (spot) closed better at Rs 197.74 (196.49) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 197 (198); RSS-5: 187 (187); Ungraded: 184 (183); ISNR 20: 193 (195) and latex 60 per cent: 130 (130).
U.S. Producer Prices Rose 0.4% in October; Core Rate Fell 0.6%
Posted: 16 Nov 2010 06:35 AM PST
Wholesale costs in the U.S. rose less than forecast in October, reflecting declines in prices of cars, trucks and computers that shows limited demand is keeping a lid on inflation.
The producer price index climbed 0.4 percent from the prior month, Labor Department figures showed today in Washington. Economists projected a 0.8 percent rise in October, according to the median estimate in a Bloomberg News survey. The so-called core measure, which excludes volatile food and energy costs, decreased 0.6 percent, the most since July 2006.
Companies have little scope to raise prices to recoup higher commodity costs as the expansion has cooled from the first half of 2010 and unemployment is stuck near 10 percent. The figures underscore the Federal Reserve’s decision this month to purchase another $600 billion in assets to help spur growth and reduce the risk of deflation, or a prolonged drop in prices.
“Wage pressure is very little and this has only limited potential for boosting price levels,” said Robert Dye, a senior economist at PNC Financial Services Group Inc. in Pittsburgh, who correctly forecast the gain in the PPI. “If you look at specific sectors like commodities, we are seeing some inflation.”
Producer prices were projected to rise 0.8 percent, according to the median of 76 forecasts in a Bloomberg News survey. Estimates ranged from gains of 0.4 percent to 1.4 percent, after a 0.4 percent rise in September.
Excluding volatile food and energy costs, economists in the survey had forecast a 0.1 percent gain for a third month.
Stock Futures
Stock-index futures maintained losses and Treasury securities rose after the report. Futures on the Standard & Poor’s 500 Index expiring next month dropped 0.5 percent to 1,190.3 at 8:48 a.m. in New York. The yield on the 10-year Treasury note, which moves inversely to price, fell to 2.90 percent from 2.96 percent late yesterday.
New car prices dropped 3 percent in October, the biggest decline since July 2006. Prices of light trucks decreased 4.3 percent, the most since October 2006.
Today’s report included the Labor Department’s valuation of quality changes in 2011 model vehicles. The decline in prices for October indicates new vehicles were outfitted with better equipment or more options, while manufacturers kept price adjustments to a minimum.
Compared with a year earlier, companies paid 4.3 percent more for goods last month after a 4 percent rise in September.
Core PPI
Excluding food and energy, wholesale prices climbed 1.5 percent in the 12 months ended in October, following a 1.6 percent year-over-year gain the prior month. The survey median called for an increase of 2.1 percent.
The cost of food decreased 0.1 percent, while energy prices rose 3.7 percent.
Expenses for intermediate goods rose 1.2 percent from the prior month and were up 6.4 percent from a year earlier, today’s report showed.
Prices of crude goods, or materials used at the earliest stage of the production process, increased 4.3 percent, the most since January.
The costs of finished computers and equipment dropped 1.1 percent in October.
Inflation is decelerating after the world’s largest economy grew at a 2 percent or less annual pace over the past two quarters, less than the Fed’s long-term estimate. It expanded 3.7 percent in the first three months of the year.
Fed’s Preference
The Fed’s preferred gauge for consumer prices, which excludes food and energy, rose 1.2 percent in September from a year earlier, the slowest pace since 2001. Fed policy makers have a long-run goal of 1.7 percent to 2 percent inflation they see as consistent with achieving legislative mandates for maximum employment and stable prices.
“You don’t want inflation to be too high but you also don’t want it to be too low,” Fed ChairmanBen S. Bernanke said in a speech on Nov. 6. “Our purpose is to provide additional stimulus to help the economy recover and to avoid potentially additional disinflation which I think we all agree would be a worse outcome.”
The Fed is purchasing more Treasuries after having cut the benchmark rate almost to zero in December 2008 and buying $1.7 trillion in securities.
Costs of raw materials are rising. Rubber futures in Tokyo surged to a 30-year high on Nov. 11, followed by a decline the next day on concern that China, the largest user, may take more steps to curb inflation. The decline continued this week.
Cooper Tire
U.S. companies experiencing the elevated costs include Cooper Tire & Rubber Co., based in Findlay, Ohio.
“Raw material costs have continued to be elevated,” Roy Armes, chief executive officer of Cooper Tire, said on a Nov. 1 teleconference with analysts. Higher materials costs will continue through 2011, he said.
Producer prices are one of three monthly inflation gauges reported by the Labor Department. Prices of goods imported into the U.S. rose 0.9 percent from the prior month, the Labor Department said Nov. 10,
Consumer prices, the broadest of the three measures, probably climbed 0.3 percent in October and the core index had the smallest year-over-year advance since 1961, according to the Bloomberg survey. The figures are due tomorrow.
(Source: http://www.bloomberg.com/news/2010-11-16/u-s-october-producer-prices-rose-0-4-fell-0-6-excluding-food-energy.html)
Rubber Advances for First Time in Three Days on Weaker Yen, Low Supplies
Posted: 16 Nov 2010 06:33 AM PST
Rubber in Tokyo rebounded after a two-day slump, as the Japanese yen weakened to a six-week low versus the dollar amid low supply from the top three producers.
April-delivery rubber on the Tokyo Commodity Exchange surged as much as 2.8 percent to 363.6 yen per kilogram ($4,377 a metric ton) before trading at 361.3 yen at 12:40 p.m. local time. The contract fell 6.7 percent in the past two days after climbing to a 30-year high. The May-delivery contract in Shanghai advanced by as much as 4.2 percent to 35,170 yuan ($5,295) a ton after tumbling 11 percent in the past three days.
“The weakening yen helped improve market sentiment,” Chaiwat Muenmee, an analyst at DS Futures Co., said today by phone from Bangkok. “Fundamentally, low supply from Thailand, Indonesia and Malaysia remains price supportive.”
Futures in Tokyo have gained 31 percent this year as producers have had difficulty catching up with growing demand because of rain and flooding that disrupted latex output in Southeast Asia.
Natural-rubber output in Thailand may decline by 10 percent to 870,000 tons in the fourth quarter, reducing total production this year by 5 percent to 3 million tons, according to an estimate by the Thai Rubber Association. Annual supply may fall by 50,000 tons over the next seven years until new trees mature, association President Luckchai Kittipol said on Nov. 10.
The cash price in Thailand, the largest producer and exporter, was unchanged today at 131 baht ($4.39) per kilogram after climbing to a record of 132 baht on Nov. 12, according to the Rubber Research Institute of Thailand. The price is likely to rise as rain across the country’s south, the main rubber plantation area, will continue to limit supply, it said.
Low Stockpiles
Low stockpiles in Japan and China mean that buyers will continue purchases, said Chaiwat of DS Futures. Stockpiles held at Japanese warehouses fell 2.8 percent to 7,552 tons on Nov. 10, data from the Rubber Trade Association of Japan showed today.
China’s inventories increased 10,735 tons last week to 60,291 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said Nov. 12. That is a 60 percent decline from this year’s high of 151,832 tons.
The Japanese currency traded near a six-week low against the dollar before a report that economists said will show U.S. industrial production expanded last month, adding to signs the nation’s recovery is gathering pace.
U.S. industrial production increased 0.3 percent last month after dropping 0.2 percent in September, according to a Bloomberg News survey before today’s report. Retail sales rose 1.2 percent in October, the most in seven months, Commerce Department data showed yesterday.
The yen traded at 83.12 per dollar after falling to 83.27 yesterday, the lowest level since Oct. 6. A weaker Japanese currency improves the appeal of yen-based contracts.
(Source: http://www.bloomberg.com/news/2010-11-16/rubber-advances-for-first-time-in-three-days-on-weaker-yen-low-supplies.html)
No plans to fix maximum price of rubber: Anand Sharma
Posted: 15 Nov 2010 05:13 PM PST
Government today said it has no plans to put a ceiling on maximum price of natural rubber in the wake of a recent spurt in prices following disruption in rubber production due to adverse weather conditions.
"The government is of the view that fixation of any maximum price of natural rubber may not be desirable, keeping in view interests of all stakeholders and sustainable existence of the rubber sector as a whole," Minister of Commerce and Industry Anand Sharma said in response to a written query in Lok Sabha.The minister said the tyre manufacturers had averred that there was a shortage of natural rubber and demanded a ceiling on the maximum price of natural rubber.
Sharma said that the average prices of natural rubber in October 2010 had jumped by 66 per cent to Rs 181.12 per kg as against Rs 108.9 per kg in the corresponding period last year.
"The main reasons for the increase in rubber prices in India...Relatively low market arrivals, increasing demand in the domestic market and persisting adverse weather conditions in the major rubber growing regions of Kerala," Sharma said.
Natural rubber price has been continously rising for the last two months and have touched all time high of Rs 206 per kg in the domestic market, as continous rains have disrupted the rubber collection in Kerala, which accounts for 80 per cent of the country's production.
Rubber prices had also witnessed the similar trends in global market as floods and cyclone have damaged rubber plantation in key rubber growing countries such Malaysia and Thailand.
(Source: http://www.business-standard.com/india/news/no-plans-to-fix-maximum-pricerubber-anand-sharma/116032/on)
Rubber Futures Decline for Second Day Amid Concerns China Will Hike Rates
Posted: 15 Nov 2010 05:10 PM PST
Rubber in Tokyo tumbled for a second day after climbing to a record last week on concern that China, the largest user, may increase borrowing costs to curb inflation, reducing demand for the commodity used to make tires and gloves.
April-delivery rubber on the Tokyo Commodity Exchange declined as much as 4.3 percent to 344.6 yen per kilogram ($4,173 a metric ton) before trading at 351 yen at 10:28 a.m. local time. The contract fell as much as 5.7 percent on Nov. 12. The May-delivery contract in Shanghai fell by the daily limit to 33,415 yuan ($5,034) a ton.
“Investors are still in a selling mood on speculation that China may raise interest rates, which would cut demand for rubber,” Varut Rungkhum, an analyst at commodity broker Agro Wealth Ltd., said today by phone.
China’s government may step up measures to contain growth in housing and consumer prices after inflation accelerated to a two-year high last month. Inflation quickened to 4.4 percent in October from 3.6 percent in September, the statistics bureau said Nov. 11.
“China may raise interest rates by the end of this year,” stoking concerns that natural-rubber consumption may decline, Gu Jiong, an analyst at commodity broker Yutaka Shoji, said today by phone from Tokyo.
Rubber futures in Tokyo have gained 27 percent this year as producers have had difficulty catching up with growing demand because of rain and flooding that disrupted latex output in Southeast Asian countries.
China Inventory
China’s natural-rubber inventories increased 10,735 tons last week to 60,291 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said Nov. 12.
The cash price in Thailand, the largest producer and exporter, remained at a record 132 baht ($4.43) per kilogram on Nov. 12 as heavy rainfall affected supply, according to the Rubber Research Institute of Thailand.
Natural-rubber output in Thailand may decline by 10 percent to 870,000 tons in the fourth quarter, reducing total production this year by 5 percent to 3 million tons, according to an estimate by the Thai Rubber Association. Annual supply may fall by 50,000 tons over the next seven years until new trees mature and produce latex, association President Luckchai Kittipol said.
(Source: http://www.bloomberg.com/news/2010-11-15/rubber-futures-decline-for-second-day-amid-concerns-china-will-hike-rates.html)
IRCo's WEEKLY MARKET SNAPSHOT: 8 - 12 November 2010
Posted: 15 Nov 2010 05:08 PM PST
RCo's DCP still stayed above 400 US cents/kg as well as rubber prices on both physical and futures markets during the week despite there was a sudden fall in rubber prices and crude oil futures on Friday in the wake of concerns that Beijing might increase interest rates to pull down inflation in the country as its consumer price index (CPI) rose to 4.4% from a year earlier in October, together with seemingly overdone technical charts on rubber futures.
Nonetheless, a fall in rubber futures will be short-lived because it still rains in rubber planted areas, especially southern Thailand, Indonesia, and Malaysia at the present time, and it will extend into the coming week. At the same time, natural rubber imports to the biggest consumer, China, in October rose 60% to 160,000 tons compared with the same month last year. In the January - October period, its imports rose 6.2% to 1.5 million tons, according to the Chinese General Administration of Customs on 10 November 2010.
On the investment front, global stock and financial markets still moved on the back of fiscal and financial policies of the big-four global economic drivers, i.e. the U.S., China, Japan and Germany, and investors are awaiting some concrete measures that these key players compromised and pledged to work together in order to adjust and to boost an uneven global economy in the long-term after the latest G-20 Summit on 11 - 12 November in Seoul and the Asia-Pacific Economic Cooperation (APEC) Forum on 13 - 14 November in Yokohama.
(Source: http://www.irco.biz/MarketWise.php?PHPSESSID=72c7294422d73786ad940dba10900973)
Rubber prices soften but exports could put a stop to further decline
Posted: 15 Nov 2010 05:06 PM PST
Thrivananthapuram: After rising to historic highs, natural rubber prices have softened to Rs 200 per kg from Rs 206 per kg last week. However, market watchers said showers in Kerala's main plantation belt and rising exports are likely to keep prices well supported here onwards.
Sources at rubber bourses in Kottayam told FE that the drop in prices could bring more rubber smoked sheets (RSS), stockpiled by dealers, to the market. Dealers supplying to tyre firms had bought over 4,000 tonne of RSS this season, but only about 1,500 tonne have changed hands to the tyre firms.
“Apprehension of a reduction in tyre production by manufacturers has created fear of demand shrinking amongst traders. Several growers, on a wait-and-watch mode following the price rally, feel they had burned their fingers as industrial appetite seems to be somewhat petering out,” a senior official from the Indian Rubber Growers Association said.
The buzz that tyre firms were gearing up to increase product prices and absorb rubber price costs has not affected farmers. On the contrary, some optimistic growers are counting on price crossing Rs 230 per kg by the first quarter of 2011.
However, market sources said this kind of price spiral can be ruled out, if tyre companies are actually planning to trim production. Over 60% of India's annual natural rubber production is consumed by the tyre manufacturers.
Automative Tyre Manufacturers Association(ATMA) threat to rollback tyre production and rubber inventories has come following unexpected floods in rubber plantations of Thailand. Similar, adverse weather has impacted production in Indonesia and Malaysia too this season.
Tyre firms fear that rubber imports from these countries could be delayed, turning their production schedules haywire.
India'a tyre industry has been leaning heavily on imports this year, as indicated from the data provided by the Rubber Board. Natural rubber imports in the first seven months of the current financial year grew to 132,724 tonne as against 132,106 tonne in the corresponding period last year.
The Met department had predicted showers in the plantation belt of Kerala till the end of the month, which should help growers. Natural rubber prices zoomed nearly 100% during the last 12 months, a Rubber Board data showed. The average price in November 2009, was at Rs 113 a kg, which rose to Rs 206 per kg in the first half of November 2010.
(Source: http://www.financialexpress.com/news/Rubber-prices-soften-but-exports-could-put-a-stop-to-further-decline/711748/)
Flood help approved for rubber growers
Posted: 15 Nov 2010 05:05 PM PST
The Council of Economic Ministers on Monday approved a plan to compensate rubber farmers whose plantations were damaged by heavy flooding across the country.
Deputy government spokesman Marut Masayawanitrong said the government will pay assistance to flood-hit rubber farmers at a rate of 17,000 baht per rai (1,600 square metres).
The Agriculture and Cooperatives Ministry last Thursday reported that more than 310,000 rai of rubber plantations were flooded nationwide.
Prime Minister Abhisit Vejjajiva said the government was too slow in paying promised compensation of 5,000 baht to each flood-affected household.
Only 20,000 households had been paid and the Interior Ministry must instruct provincial governors to speed up the payment process, Mr Abhisit said.
The government initially estimated about one million households were eligible.
The Meteorological Department has warned people living on hill sides and near waterways in eight southern provinces to brace for heavy monsoonal rain, possible flash floods and mudslides from now until Wednesday.
Director-general Wibul Sangauanpong said the provinces at risk are Chumphon, Surat Thani, Nakhon Si Thammarat, Songkhla, Phatthalung, Yala, Pattani and Narathiwat.
He advised residents to listen closely to weather forecasts.
Mr Wibul said floodwaters are still inundating areas in seven provinces in the Northeast and another six in the Central Plains, affecting altogether 820,941 people.
The flooding continues in four provinces in the South, where a total of 672,098 people have been affected, he added.
A total of 224 people had been killed by the flooding that has hit many provinces since Oct 10. Of which, 152 were flood victims in the North, Northeast, East and Central Plains and 72 in the South.
(Source: http://www.bangkokpost.com/news/local/206504/more-flood-compensation-approved)
Rubber Project Requests Upgrade to Enterprise
Posted: 15 Nov 2010 05:04 PM PST
The National Nucleus Project of Rubber Plantation and Processing (NNPRPP) submitted a proposal to the Privatisation and Public Enterprises Supervision Agency (PPESA) to be reformed as an enterprise two weeks ago.
The agency asked for the proposal to be amended in a written reply made three days after the proposal’s submission, according to Million Worku, general manger of the NPRPP.
“One of the agency’s requests was to list the project’s capital, including the physical assets as well as money in the bank,” he told Fortune.
The proposal’s submission was confirmed by sources at the PPESA, who requested anonymity because they were not authorised to officially comment.
The project, which was previously under the Addis Tyre Factory, was initiated as a test project for the plantation of rubber trees on 10ht of land. However, Matador, the company which bought Addis Tyre through a joint venture (JV) in 2004, rejected the project and it was put under the supervision of the PPESA.
“The project’s capital was registered as 333 million Br at the time it was put under the PPESA,” Million told Fortune. “The proposal submitted to the agency includes the organisational structure of the enterprise to be formed, job descriptions, and plans for future expansion.”
Since being under the supervision of the agency, the project has been granted an additional 2,000ht plot in Bench Magi Zone, Southern Nations, Nationalities, and Peoples (SNNP) Regional State, where the previous plot is located.
Under the project, which has 100 employees, rubber trees have been planted on 1,438ht in addition to the previous 10ht bringing the total trees to 5,000, according to Million.
A rubber plant takes five to six years to begin producing the latex used to make rubber and can last up to 30 years.
“The project does not only want to concentrate on planting trees, but aims to install its own factory as well,” Million told Fortune. “We had a discussion with the Metal and Engineering Corporation (MetEC) for them to install the factory and we have visited factory sites in Côte d’Ivoire. It was agreed that it would be possible to install it using local resources.”
The project has been producing 1.8tn of latex from 10ht per month while the market demands 10,000tn annually, according to the general manager of the project, who added that most of the rubber used in Ethiopia is imported from Malaysia, Indonesia, and Thailand.
“The international price for a kilogramme of rubber is 60.2 Br, which is equal to the local price,” Million said. “The price of imported rubber increases significantly when transportation tax and duties are added to it.”
(Source: http://addisfortune.com/Rubber%20Project%20Requests%20Upgrade%20to%20Enterprise.htm)
Kottayam, Nov. 16
Physical rubber prices saw a mixed trend on Tuesday. The undercurrent was weak following the declines on the National Multi Commodity Exchange (NMCE). There was no selling pressure in the market as widespread rains reported from the plantation areas had created supply fears. According to sources, major grades slipped on buyer resistance while ungraded rubber improved on comparatively better demand.
Among other news, China's total rubber consumption this year is estimated to reach 6.45 million tonnes, up by 9.7 per cent compared with last year, the China Rubber Industry Association said. Of this, natural rubber consumption is expected to rise 3.7 per cent to 2.8 million tonnes, while synthetic rubber consumption is forecast to rise 14.8 per cent to 3.65 million tonnes.
Sheet rubber weakened to Rs 197 (198) a kg in the main marketing centres. The grade moved down to Rs 197.50 (198) a kg both at Kottayam and Kochi according to Rubber Board. The transactions were in a low key.
Futures weak
In futures, the December series weakened to Rs 196.75 (200.18), January to Rs 198.62 (202.18) and February to Rs 202.60 (205.38) while the March series finished the debut trading session at Rs 205.61 a kg for RSS 4 on the NMCE. RSS 3 improved at with November futures risign to ¥357.3 (Rs 194.18) from ¥351 a kg during the day session and then slipped to ¥350 (Rs 190.21) in the night session on the Tokyo Commodity Exchange. The grade (spot) closed better at Rs 197.74 (196.49) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 197 (198); RSS-5: 187 (187); Ungraded: 184 (183); ISNR 20: 193 (195) and latex 60 per cent: 130 (130).
U.S. Producer Prices Rose 0.4% in October; Core Rate Fell 0.6%
Posted: 16 Nov 2010 06:35 AM PST
Wholesale costs in the U.S. rose less than forecast in October, reflecting declines in prices of cars, trucks and computers that shows limited demand is keeping a lid on inflation.
The producer price index climbed 0.4 percent from the prior month, Labor Department figures showed today in Washington. Economists projected a 0.8 percent rise in October, according to the median estimate in a Bloomberg News survey. The so-called core measure, which excludes volatile food and energy costs, decreased 0.6 percent, the most since July 2006.
Companies have little scope to raise prices to recoup higher commodity costs as the expansion has cooled from the first half of 2010 and unemployment is stuck near 10 percent. The figures underscore the Federal Reserve’s decision this month to purchase another $600 billion in assets to help spur growth and reduce the risk of deflation, or a prolonged drop in prices.
“Wage pressure is very little and this has only limited potential for boosting price levels,” said Robert Dye, a senior economist at PNC Financial Services Group Inc. in Pittsburgh, who correctly forecast the gain in the PPI. “If you look at specific sectors like commodities, we are seeing some inflation.”
Producer prices were projected to rise 0.8 percent, according to the median of 76 forecasts in a Bloomberg News survey. Estimates ranged from gains of 0.4 percent to 1.4 percent, after a 0.4 percent rise in September.
Excluding volatile food and energy costs, economists in the survey had forecast a 0.1 percent gain for a third month.
Stock Futures
Stock-index futures maintained losses and Treasury securities rose after the report. Futures on the Standard & Poor’s 500 Index expiring next month dropped 0.5 percent to 1,190.3 at 8:48 a.m. in New York. The yield on the 10-year Treasury note, which moves inversely to price, fell to 2.90 percent from 2.96 percent late yesterday.
New car prices dropped 3 percent in October, the biggest decline since July 2006. Prices of light trucks decreased 4.3 percent, the most since October 2006.
Today’s report included the Labor Department’s valuation of quality changes in 2011 model vehicles. The decline in prices for October indicates new vehicles were outfitted with better equipment or more options, while manufacturers kept price adjustments to a minimum.
Compared with a year earlier, companies paid 4.3 percent more for goods last month after a 4 percent rise in September.
Core PPI
Excluding food and energy, wholesale prices climbed 1.5 percent in the 12 months ended in October, following a 1.6 percent year-over-year gain the prior month. The survey median called for an increase of 2.1 percent.
The cost of food decreased 0.1 percent, while energy prices rose 3.7 percent.
Expenses for intermediate goods rose 1.2 percent from the prior month and were up 6.4 percent from a year earlier, today’s report showed.
Prices of crude goods, or materials used at the earliest stage of the production process, increased 4.3 percent, the most since January.
The costs of finished computers and equipment dropped 1.1 percent in October.
Inflation is decelerating after the world’s largest economy grew at a 2 percent or less annual pace over the past two quarters, less than the Fed’s long-term estimate. It expanded 3.7 percent in the first three months of the year.
Fed’s Preference
The Fed’s preferred gauge for consumer prices, which excludes food and energy, rose 1.2 percent in September from a year earlier, the slowest pace since 2001. Fed policy makers have a long-run goal of 1.7 percent to 2 percent inflation they see as consistent with achieving legislative mandates for maximum employment and stable prices.
“You don’t want inflation to be too high but you also don’t want it to be too low,” Fed ChairmanBen S. Bernanke said in a speech on Nov. 6. “Our purpose is to provide additional stimulus to help the economy recover and to avoid potentially additional disinflation which I think we all agree would be a worse outcome.”
The Fed is purchasing more Treasuries after having cut the benchmark rate almost to zero in December 2008 and buying $1.7 trillion in securities.
Costs of raw materials are rising. Rubber futures in Tokyo surged to a 30-year high on Nov. 11, followed by a decline the next day on concern that China, the largest user, may take more steps to curb inflation. The decline continued this week.
Cooper Tire
U.S. companies experiencing the elevated costs include Cooper Tire & Rubber Co., based in Findlay, Ohio.
“Raw material costs have continued to be elevated,” Roy Armes, chief executive officer of Cooper Tire, said on a Nov. 1 teleconference with analysts. Higher materials costs will continue through 2011, he said.
Producer prices are one of three monthly inflation gauges reported by the Labor Department. Prices of goods imported into the U.S. rose 0.9 percent from the prior month, the Labor Department said Nov. 10,
Consumer prices, the broadest of the three measures, probably climbed 0.3 percent in October and the core index had the smallest year-over-year advance since 1961, according to the Bloomberg survey. The figures are due tomorrow.
(Source: http://www.bloomberg.com/news/2010-11-16/u-s-october-producer-prices-rose-0-4-fell-0-6-excluding-food-energy.html)
Rubber Advances for First Time in Three Days on Weaker Yen, Low Supplies
Posted: 16 Nov 2010 06:33 AM PST
Rubber in Tokyo rebounded after a two-day slump, as the Japanese yen weakened to a six-week low versus the dollar amid low supply from the top three producers.
April-delivery rubber on the Tokyo Commodity Exchange surged as much as 2.8 percent to 363.6 yen per kilogram ($4,377 a metric ton) before trading at 361.3 yen at 12:40 p.m. local time. The contract fell 6.7 percent in the past two days after climbing to a 30-year high. The May-delivery contract in Shanghai advanced by as much as 4.2 percent to 35,170 yuan ($5,295) a ton after tumbling 11 percent in the past three days.
“The weakening yen helped improve market sentiment,” Chaiwat Muenmee, an analyst at DS Futures Co., said today by phone from Bangkok. “Fundamentally, low supply from Thailand, Indonesia and Malaysia remains price supportive.”
Futures in Tokyo have gained 31 percent this year as producers have had difficulty catching up with growing demand because of rain and flooding that disrupted latex output in Southeast Asia.
Natural-rubber output in Thailand may decline by 10 percent to 870,000 tons in the fourth quarter, reducing total production this year by 5 percent to 3 million tons, according to an estimate by the Thai Rubber Association. Annual supply may fall by 50,000 tons over the next seven years until new trees mature, association President Luckchai Kittipol said on Nov. 10.
The cash price in Thailand, the largest producer and exporter, was unchanged today at 131 baht ($4.39) per kilogram after climbing to a record of 132 baht on Nov. 12, according to the Rubber Research Institute of Thailand. The price is likely to rise as rain across the country’s south, the main rubber plantation area, will continue to limit supply, it said.
Low Stockpiles
Low stockpiles in Japan and China mean that buyers will continue purchases, said Chaiwat of DS Futures. Stockpiles held at Japanese warehouses fell 2.8 percent to 7,552 tons on Nov. 10, data from the Rubber Trade Association of Japan showed today.
China’s inventories increased 10,735 tons last week to 60,291 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said Nov. 12. That is a 60 percent decline from this year’s high of 151,832 tons.
The Japanese currency traded near a six-week low against the dollar before a report that economists said will show U.S. industrial production expanded last month, adding to signs the nation’s recovery is gathering pace.
U.S. industrial production increased 0.3 percent last month after dropping 0.2 percent in September, according to a Bloomberg News survey before today’s report. Retail sales rose 1.2 percent in October, the most in seven months, Commerce Department data showed yesterday.
The yen traded at 83.12 per dollar after falling to 83.27 yesterday, the lowest level since Oct. 6. A weaker Japanese currency improves the appeal of yen-based contracts.
(Source: http://www.bloomberg.com/news/2010-11-16/rubber-advances-for-first-time-in-three-days-on-weaker-yen-low-supplies.html)
No plans to fix maximum price of rubber: Anand Sharma
Posted: 15 Nov 2010 05:13 PM PST
Government today said it has no plans to put a ceiling on maximum price of natural rubber in the wake of a recent spurt in prices following disruption in rubber production due to adverse weather conditions.
"The government is of the view that fixation of any maximum price of natural rubber may not be desirable, keeping in view interests of all stakeholders and sustainable existence of the rubber sector as a whole," Minister of Commerce and Industry Anand Sharma said in response to a written query in Lok Sabha.The minister said the tyre manufacturers had averred that there was a shortage of natural rubber and demanded a ceiling on the maximum price of natural rubber.
Sharma said that the average prices of natural rubber in October 2010 had jumped by 66 per cent to Rs 181.12 per kg as against Rs 108.9 per kg in the corresponding period last year.
"The main reasons for the increase in rubber prices in India...Relatively low market arrivals, increasing demand in the domestic market and persisting adverse weather conditions in the major rubber growing regions of Kerala," Sharma said.
Natural rubber price has been continously rising for the last two months and have touched all time high of Rs 206 per kg in the domestic market, as continous rains have disrupted the rubber collection in Kerala, which accounts for 80 per cent of the country's production.
Rubber prices had also witnessed the similar trends in global market as floods and cyclone have damaged rubber plantation in key rubber growing countries such Malaysia and Thailand.
(Source: http://www.business-standard.com/india/news/no-plans-to-fix-maximum-pricerubber-anand-sharma/116032/on)
Rubber Futures Decline for Second Day Amid Concerns China Will Hike Rates
Posted: 15 Nov 2010 05:10 PM PST
Rubber in Tokyo tumbled for a second day after climbing to a record last week on concern that China, the largest user, may increase borrowing costs to curb inflation, reducing demand for the commodity used to make tires and gloves.
April-delivery rubber on the Tokyo Commodity Exchange declined as much as 4.3 percent to 344.6 yen per kilogram ($4,173 a metric ton) before trading at 351 yen at 10:28 a.m. local time. The contract fell as much as 5.7 percent on Nov. 12. The May-delivery contract in Shanghai fell by the daily limit to 33,415 yuan ($5,034) a ton.
“Investors are still in a selling mood on speculation that China may raise interest rates, which would cut demand for rubber,” Varut Rungkhum, an analyst at commodity broker Agro Wealth Ltd., said today by phone.
China’s government may step up measures to contain growth in housing and consumer prices after inflation accelerated to a two-year high last month. Inflation quickened to 4.4 percent in October from 3.6 percent in September, the statistics bureau said Nov. 11.
“China may raise interest rates by the end of this year,” stoking concerns that natural-rubber consumption may decline, Gu Jiong, an analyst at commodity broker Yutaka Shoji, said today by phone from Tokyo.
Rubber futures in Tokyo have gained 27 percent this year as producers have had difficulty catching up with growing demand because of rain and flooding that disrupted latex output in Southeast Asian countries.
China Inventory
China’s natural-rubber inventories increased 10,735 tons last week to 60,291 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said Nov. 12.
The cash price in Thailand, the largest producer and exporter, remained at a record 132 baht ($4.43) per kilogram on Nov. 12 as heavy rainfall affected supply, according to the Rubber Research Institute of Thailand.
Natural-rubber output in Thailand may decline by 10 percent to 870,000 tons in the fourth quarter, reducing total production this year by 5 percent to 3 million tons, according to an estimate by the Thai Rubber Association. Annual supply may fall by 50,000 tons over the next seven years until new trees mature and produce latex, association President Luckchai Kittipol said.
(Source: http://www.bloomberg.com/news/2010-11-15/rubber-futures-decline-for-second-day-amid-concerns-china-will-hike-rates.html)
IRCo's WEEKLY MARKET SNAPSHOT: 8 - 12 November 2010
Posted: 15 Nov 2010 05:08 PM PST
RCo's DCP still stayed above 400 US cents/kg as well as rubber prices on both physical and futures markets during the week despite there was a sudden fall in rubber prices and crude oil futures on Friday in the wake of concerns that Beijing might increase interest rates to pull down inflation in the country as its consumer price index (CPI) rose to 4.4% from a year earlier in October, together with seemingly overdone technical charts on rubber futures.
Nonetheless, a fall in rubber futures will be short-lived because it still rains in rubber planted areas, especially southern Thailand, Indonesia, and Malaysia at the present time, and it will extend into the coming week. At the same time, natural rubber imports to the biggest consumer, China, in October rose 60% to 160,000 tons compared with the same month last year. In the January - October period, its imports rose 6.2% to 1.5 million tons, according to the Chinese General Administration of Customs on 10 November 2010.
On the investment front, global stock and financial markets still moved on the back of fiscal and financial policies of the big-four global economic drivers, i.e. the U.S., China, Japan and Germany, and investors are awaiting some concrete measures that these key players compromised and pledged to work together in order to adjust and to boost an uneven global economy in the long-term after the latest G-20 Summit on 11 - 12 November in Seoul and the Asia-Pacific Economic Cooperation (APEC) Forum on 13 - 14 November in Yokohama.
(Source: http://www.irco.biz/MarketWise.php?PHPSESSID=72c7294422d73786ad940dba10900973)
Rubber prices soften but exports could put a stop to further decline
Posted: 15 Nov 2010 05:06 PM PST
Thrivananthapuram: After rising to historic highs, natural rubber prices have softened to Rs 200 per kg from Rs 206 per kg last week. However, market watchers said showers in Kerala's main plantation belt and rising exports are likely to keep prices well supported here onwards.
Sources at rubber bourses in Kottayam told FE that the drop in prices could bring more rubber smoked sheets (RSS), stockpiled by dealers, to the market. Dealers supplying to tyre firms had bought over 4,000 tonne of RSS this season, but only about 1,500 tonne have changed hands to the tyre firms.
“Apprehension of a reduction in tyre production by manufacturers has created fear of demand shrinking amongst traders. Several growers, on a wait-and-watch mode following the price rally, feel they had burned their fingers as industrial appetite seems to be somewhat petering out,” a senior official from the Indian Rubber Growers Association said.
The buzz that tyre firms were gearing up to increase product prices and absorb rubber price costs has not affected farmers. On the contrary, some optimistic growers are counting on price crossing Rs 230 per kg by the first quarter of 2011.
However, market sources said this kind of price spiral can be ruled out, if tyre companies are actually planning to trim production. Over 60% of India's annual natural rubber production is consumed by the tyre manufacturers.
Automative Tyre Manufacturers Association(ATMA) threat to rollback tyre production and rubber inventories has come following unexpected floods in rubber plantations of Thailand. Similar, adverse weather has impacted production in Indonesia and Malaysia too this season.
Tyre firms fear that rubber imports from these countries could be delayed, turning their production schedules haywire.
India'a tyre industry has been leaning heavily on imports this year, as indicated from the data provided by the Rubber Board. Natural rubber imports in the first seven months of the current financial year grew to 132,724 tonne as against 132,106 tonne in the corresponding period last year.
The Met department had predicted showers in the plantation belt of Kerala till the end of the month, which should help growers. Natural rubber prices zoomed nearly 100% during the last 12 months, a Rubber Board data showed. The average price in November 2009, was at Rs 113 a kg, which rose to Rs 206 per kg in the first half of November 2010.
(Source: http://www.financialexpress.com/news/Rubber-prices-soften-but-exports-could-put-a-stop-to-further-decline/711748/)
Flood help approved for rubber growers
Posted: 15 Nov 2010 05:05 PM PST
The Council of Economic Ministers on Monday approved a plan to compensate rubber farmers whose plantations were damaged by heavy flooding across the country.
Deputy government spokesman Marut Masayawanitrong said the government will pay assistance to flood-hit rubber farmers at a rate of 17,000 baht per rai (1,600 square metres).
The Agriculture and Cooperatives Ministry last Thursday reported that more than 310,000 rai of rubber plantations were flooded nationwide.
Prime Minister Abhisit Vejjajiva said the government was too slow in paying promised compensation of 5,000 baht to each flood-affected household.
Only 20,000 households had been paid and the Interior Ministry must instruct provincial governors to speed up the payment process, Mr Abhisit said.
The government initially estimated about one million households were eligible.
The Meteorological Department has warned people living on hill sides and near waterways in eight southern provinces to brace for heavy monsoonal rain, possible flash floods and mudslides from now until Wednesday.
Director-general Wibul Sangauanpong said the provinces at risk are Chumphon, Surat Thani, Nakhon Si Thammarat, Songkhla, Phatthalung, Yala, Pattani and Narathiwat.
He advised residents to listen closely to weather forecasts.
Mr Wibul said floodwaters are still inundating areas in seven provinces in the Northeast and another six in the Central Plains, affecting altogether 820,941 people.
The flooding continues in four provinces in the South, where a total of 672,098 people have been affected, he added.
A total of 224 people had been killed by the flooding that has hit many provinces since Oct 10. Of which, 152 were flood victims in the North, Northeast, East and Central Plains and 72 in the South.
(Source: http://www.bangkokpost.com/news/local/206504/more-flood-compensation-approved)
Rubber Project Requests Upgrade to Enterprise
Posted: 15 Nov 2010 05:04 PM PST
The National Nucleus Project of Rubber Plantation and Processing (NNPRPP) submitted a proposal to the Privatisation and Public Enterprises Supervision Agency (PPESA) to be reformed as an enterprise two weeks ago.
The agency asked for the proposal to be amended in a written reply made three days after the proposal’s submission, according to Million Worku, general manger of the NPRPP.
“One of the agency’s requests was to list the project’s capital, including the physical assets as well as money in the bank,” he told Fortune.
The proposal’s submission was confirmed by sources at the PPESA, who requested anonymity because they were not authorised to officially comment.
The project, which was previously under the Addis Tyre Factory, was initiated as a test project for the plantation of rubber trees on 10ht of land. However, Matador, the company which bought Addis Tyre through a joint venture (JV) in 2004, rejected the project and it was put under the supervision of the PPESA.
“The project’s capital was registered as 333 million Br at the time it was put under the PPESA,” Million told Fortune. “The proposal submitted to the agency includes the organisational structure of the enterprise to be formed, job descriptions, and plans for future expansion.”
Since being under the supervision of the agency, the project has been granted an additional 2,000ht plot in Bench Magi Zone, Southern Nations, Nationalities, and Peoples (SNNP) Regional State, where the previous plot is located.
Under the project, which has 100 employees, rubber trees have been planted on 1,438ht in addition to the previous 10ht bringing the total trees to 5,000, according to Million.
A rubber plant takes five to six years to begin producing the latex used to make rubber and can last up to 30 years.
“The project does not only want to concentrate on planting trees, but aims to install its own factory as well,” Million told Fortune. “We had a discussion with the Metal and Engineering Corporation (MetEC) for them to install the factory and we have visited factory sites in Côte d’Ivoire. It was agreed that it would be possible to install it using local resources.”
The project has been producing 1.8tn of latex from 10ht per month while the market demands 10,000tn annually, according to the general manager of the project, who added that most of the rubber used in Ethiopia is imported from Malaysia, Indonesia, and Thailand.
“The international price for a kilogramme of rubber is 60.2 Br, which is equal to the local price,” Million said. “The price of imported rubber increases significantly when transportation tax and duties are added to it.”
(Source: http://addisfortune.com/Rubber%20Project%20Requests%20Upgrade%20to%20Enterprise.htm)
Subscribe to:
Posts (Atom)
