Sheet rubber hovers near Rs 200/kg

Sheet rubber hovers near Rs 200/kg


Kottayam, Nov. 4

Spot rubber increased to new record highs on Thursday. According to analysts, widespread rains during the past couple of days and acute short supplies were the key factors behind the current bull run. Sharp gains in the domestic and international futures catalysed the sentiments further. “We expect the market to break the magical figure of Rs 200 if the fundamental and technical positions of the market remain unchanged,” a trader said.

Sheet rubber closed firm at Rs 199 (195.50) a kg after hitting an intra-day high of Rs 200 a kg in early trades. The grade increased to Rs 198 (195) a kg both at Kottayam and Kochi as quoted by Rubber Board on its official Web site.

The November series improved to Rs 199.50 (197.86), December to Rs 202.10 (200.67), January to Rs 204.25 (202.56) and February to Rs 206.30 (204.87) a kg for RSS 4 on the National Multi Commodity Exchange. RSS 3 flared up further with November futures increasing to ¥338.6 (Rs 184.77) from ¥324.5 during the day session and then to ¥345.4 (Rs 188.53) in the night session on the Tokyo Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 199 (195.50); RSS-5: 188 (186); ungraded: 186 (183); ISNR 20: 195 (192) and latex 60 per cent: 130 (128).


1)Rubber Board gets VJ Kurian as new Chairman

KOTTAYAM (Commodity Online): VJ Kurian an IAS offier of 1983 batch is the incoming Chairman at the Rubber Board of India.

The Board informed in a statement issued this evening that VJ Kurian has taken over charge as the Chairman of the Rubber Board from Sajen Peter, who is going to the Kerala cadre on completion of his tenure.

Kurian is currently working as the Chairman of the Spices Board. He had served as the collector of Alapuzha and Ernakulam Districts and as the Managing Director of Cochin International Air Port Ltd.

Peter had been the Chairman of the Rubber Board from 2005 August.


2)India Oct rubber imports rise sharply 81.2%

NEW DELHI (Commodity Online): Improved demand from tyre manufactures amid poor production due to heavy rain compelled India to go for heavy import of natural rubber in October.

According Rubber of India, the country imported 18,148 tons during October, 81.2% more as compared to last year. Total imports during October 2009 stood at 10,011 tons, it said.

Consumption in the domestic market grew by 4.5 % to 81,500 tons in October 2010 from 77,950 tons in October 2009 on increased demand from tyre manufacturers.

The aggregate consumption of natural rubber in the first seven months (April-October) of the current fiscal grew by 3% to 550,550 tons from 534,315 tonnes in the comparable period last year.

Disruption in production led to a shortage of 30% which was met by the imports, said an expert.


3)Rubber scales peak as floods wreak havoc in S-E Asia

TOKYO (Commodity Online): Rubber prices in the Tokyo markets surged to a fresh highs on adverse climatic conditions.

According to a Bloomberg report, the Rubber prices in Tokyo gained the most since September 26 as flood impact disrupted supplies.

The devastating floods in Thailand and Malaysia have raised concerns of rubber supplies that may fuel a price rally in the plant crop.

The most-active contract on the Tokyo Commodity Exchange was up 3.1% to 342.1 yen per kilogram ($4,230 a metric ton), the biggest daily increase since September 21.

Southeast Asian countries of Thailand, Vietnam and Malaysia are badly hit by cyclones and monsoon rains during past month, killing hundreds of people and damaging agricultural land.

Floods and blackouts forced the cash-rubber center in Thailand’s Songkhla province to close on November 2 to November 3, the report noted.

Shanghai Futures too made sharp gains of 3.4% to a record 33,755 yuan ($5,056) per tonne, while it had gained 3.5% a day earlier.

Meanwhile, the June-delivery contract on the Agricultural Futures Exchange of Thailand rose 1% to hit an all-time high of 126.50 baht ($4.26) per kg in the morning trades today.


4)Rubber Gains Most Since Sept. 21 as Floods Raise Supply Shortage Concerns

Rubber in Tokyo climbed to a 27-month high, while futures in Shanghai and Thailand gained to records, after flooding in major growing nations raised concerns that a supply shortage will worsen, fueling a price rally.

The April-delivery contract on the Tokyo Commodity Exchange rose as much as 4.1 percent to 345.5 yen per kilogram ($4,274 a metric ton), the highest intraday level since July 14, 2008, before settling at 345 yen.

“Reports of floods in Thailand and Malaysia raised concerns over supply shortages, supporting prices,” Gu Jiong, an analyst at commodity broker Yutaka Shoji Co. said from Tokyo. “Supplies are unlikely to increase in the short term.”

Cyclones and monsoon rains have swamped parts of Southeast Asia in the past month, killing hundreds of people in Thailand, Vietnam and Malaysia and damaging agricultural land.

Eleven provinces in Thailand’s south, a major plantation area, have been inundated since Nov. 1, bringing total affected area to 50 provinces and leaving 122 dead, Thailand’s Department of Disaster Prevention and Mitigation said on its website today.

Floods and blackouts forced the cash-rubber center in Thailand’s Songkhla province to close since Nov. 2. Two other cash-rubber markets in Thailand’s south remained open, according to the Rubber Research Institute of Thailand.

“Farmers can’t go out tapping amid heavy rains and floods, which reduces production, while floods can also damage rubber stocks,” said Chaiwat Muenmee, analyst at DS Futures Co.

Futures in Shanghai gained for a fourth day, rising as much as 4.6 percent to a record 34,150 yuan ($5,112) a ton before closing at 34,130 yuan. The most-active contract on the Agricultural Futures Exchange of Thailand rose 2.2 percent to an all-time high of 127.70 baht ($4.30) per kilogram at 2:03 p.m. Bangkok time, according to the exchange.

Indonesia Record

Rubber in Indonesia, the second-largest producer and exporter, climbed to a record after heavy rains and floods in the country hurt supplies, according to an industry association.

“The price rose to a record after heavy rains and floods hit Thailand, Malaysia and Sumatra,” Asril Sutan Amir, chairman of the Rubber Association of Indonesia, said in a phone interview today. Thailand, Indonesia and Malaysia represent a combined 70 percent of global natural-rubber production.

The free-on-board price, or cost without freight and insurance, for Indonesia’s benchmark SIR-20 grade climbed to an all-time high of $4.06 a kilogram today, Amir said. The price was quoted at $3.99 yesterday and was about $2.87 at the start of the year, according to data compiled by International Rubber Consortium.

Fed Measures

Production this year will probably drop 5 percent, Amir said. The association earlier forecast output this year of about 2.4 million tons. “Factories can’t fulfill contracts,” he said.

“The Fed’s measures to bolster the economy also helped boost rallies in commodities and stocks,” Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co., said by phone from Bangkok.

Asian stocks climbed, pushing a regional benchmark index to the highest in more than two years after the U.S. Federal Reserve said it will expand record measures to boost the world’s largest economy.

The Fed expanded asset buying by $600 billion after near- zero interest rates and $1.7 trillion in securities purchases helped pull the economy out of recession, without reviving the labor market. A revival of U.S. demand would support growth in the Asia-Pacific region, where government reports showed employers added more jobs than economists estimated in New Zealand and a seventh straight month of gains in Australian retail sales.

“The move to inject more money into the system is a massively important thing,” said James Holt, who helps manage about A$40 billion ($40.2 billion) at BlackRock Investment Management (Australia) Ltd. “Every asset class gets a kick along. The recovery looks like it’s happening, but the overwhelming evidence is that it’s a weaker-than-expected recovery.”



5)Commodities to Surge on Demand, Dollar, Standard Chartered's Murthy Says
Posted: 04 Nov 2010 06:40 AM PDT
Commodity prices are set to surge, driven by a weaker dollar and increased demand, according to Standard Chartered Plc, which plans to boost hiring in metals, agriculture and coal by 10 percent next year as revenue climbs.

“We’re still in a leg up,” Arun Murthy, global head of commodities, said in an interview. “You may have 10 percent, 15 percent retracement in prices, but that would offer a buying opportunity,” said Murthy, who spent 11 years at Goldman Sachs Group Inc.’s commodities team in Singapore and worked at Lehman Brothers Holdings Inc. before joining Standard Chartered.

Commodities as measured by the Thomson Reuters/Jefferies CRB Index have increased 18 percent in the second half as a China-led recovery boosted demand for raw materials. Over the next five years, Asian exchanges will start to set, not follow, commodity prices, Murthy said.

“The level of activity in Asia, Africa and the Middle East is increasing,” said Murthy, who joined the bank in October 2008 as global head of energy trading and later took on his current role. “The trend is set to continue, especially as economic power shifts from West to East.”

London-based Standard Chartered, which generates more than 90 percent of profit from Asia, Africa and the Middle East, reported record first-half net income of $2.15 billion. Revenue from energy, metals and agriculture, up 15 percent in the first 10 months, may gain 20 percent on year by the end of 2010, said Murthy, declining to say how much the commodities unit made.

Coal, Rubber

“We see opportunities in coal, palm oil, the platinum- group metals and rubber, and iron ore,” primarily in derivatives, Murthy said yesterday. The unit may increase headcount by about 10 percent next year from the current 80, he said. The team numbered 35 when Murthy started at the bank.

Among recent hires are Alan Koh, who spent 15 years at Morgan Stanley, and Guy Williams, previously with Citigroup Inc. Koh became global head of energy sales in Singapore, while Williams leads the agriculture-trading business in London.

Copper, which traded as high as $8,499 a metric ton today, has surged 29 percent over the past year on rising demand and a weaker U.S. currency. Cotton climbed to a record $1.3920 a pound this week; gold traded an all-time high of $1,387.35 an ounce last month; and New York crude has risen 7.9 percent this year.

Copper will extend a bull run as “mammoth demand” from China and supply constraints drive the market into a deficit from next year to 2014, Michael Haigh, Standard Chartered’s head of commodity research, said today at a seminar in Seoul.

‘Very Bullish’

The dollar’s weakness, inflationary pressure in the U.S. over the next 12 to 18 months, and stronger emerging-market demand, all “imply that commodities are going to be very bullish,” Murthy said.

Murthy’s forecast echoes that from APG Asset Management, which oversees investments for the world’s third-largest pension fund. Olav Houben, senior portfolio manager commodities at the Amsterdam-based company, said last month that commodities will extend gains on increased demand from emerging markets.

The Dollar Index has dropped 14 percent from this year’s high in June to yesterday’s close, boosting investment demand for metals and grains. The U.S. Federal Reserve said yesterday that it would buy an additional $600 billion of Treasuries in a bid to stimulate growth and cut unemployment.

Revenue Boost

Standard Chartered’s commodities revenue has been boosted by financing inventories of aluminum, fuel and agricultural products, Murthy said. The bank may also in future take delivery of metals from the mines that it finances and sell the product to consumers in China, he said.

China’s raw-material needs have increased over the past five years, accounting for about 41 percent of global copper demand and 39 percent of cotton sales, according to Morgan Stanley estimates. Manufacturing in the country expanded at the fastest in six months in October even after policy makers raised interest rates and boosted reserve requirements at banks.

Exchanges and banks are expanding into iron ore as China, the largest buyer of the key ingredient for steel, increased demand to a record last year. Singapore Exchange Ltd., operator of the city-state’s securities and derivatives markets, became the first bourse to clear swaps of the raw material last year, followed by LCH Clearnet Ltd. and Intercontinental Exchange Inc.

As China’s demand continues to expand, trade volumes on the Shanghai and Dalian commodity exchanges will increase, influencing prices on Western bourses, including the London Metal Exchange, he said.

“We can expect that in the next five years, Asia will set the benchmark,” subject to deregulation in China, including allowing overseas companies to trade on commodity exchanges, Murthy said.

(bloomberg.com)


6)Natural rubber imports soar by 81.2%
Posted: 04 Nov 2010 06:39 AM PDT
New Delhi: Natural rubber imports jumped by 81.2% to 18,148 tonnes in October on increased demand from tyre manufacturers and disruption in domestic production due to heavy rains, the Rubber Board said on Thursday.
The total import of natural rubber stood at 10,011 tonnes in October 2009, the board said in a statement.
Disruption of production in Kerala, key rubber growing state, has led to a shortage to tune of 30% which was met through imports, Indian Rubber Dealers Federation Treasurer Ibrahim Jalal said.
The import of natural rubber during the first seven-month (April-October perido) of current fiscal grew marginally to 132,724 tonnes against 132,106 tonnes in the comparable period last fiscal.
The board said that surge in import took place after June, 2010, as the international prices of natural rubber remained lower than the domestic price from that month.
The consumption of natural rubber in the domestic market grew by 4.5% to 81,500 tonnes in October,2010 on increased demand from the tyre manufacturers.
Consumption of natural rubber stood at 77,950 tonnes in the corresponding period last year, the board said.
The aggregate consumption of the natural rubber in the first seven-month (April-October period) of current fiscal grew by 3% to 550,550 tonnes against 534,315 tonnes in the comparable period last year.
The board said that consumption mainly grew on increase in demand from tyre manufacturer, whose demand for the commodity grew by 5% in October 2010.
(livemint.com)


7)
Natural rubber output dips 7.6% in October
Posted: 04 Nov 2010 06:38 AM PDT
SIR20/SMR20/STR20 processing line not for tyre or recycle hnsinyoung.com
Due to torrential rain, natural rubber (NR) output declined 7.6 per cent in October, paving the way for a bullish market. The local market continued the uptrend and benchmark grade RSS-4 was today quoted at Rs 195 a kg.

The production dropped to 82,000 tonnes as against 88,775 tonnes in the same month last year, according to latest data by the Rubber Board.

During the month, consumption increased to 81,500 tonnes as against 77,950 tonnes in the same month last year. This was mainly due to an upsurge in production of tyres in the country on rising automobile sales.

During April-October, the average monthly increase in consumption of NR by tyre companies was five per cent.

The production and consumption mismatch caused a serious supply crunch during the past few months, leaving more room for rise in prices.

The static import hampered the supply crunch further. Imports were heavily affected due to the price increase in major global markets and crop losses in producing countries like Thailand and Indonesia.

The domestic production of rubber in the first seven months of the current financial year increased 4.5 per cent at 457,250 tonnes as against 437,400 tonnes in the same period last year.

The consumption in the same period increased three per cent at 550,550 tonnes as against 534,315 tonnes in the same period of 2009-10.

(sify.com)

8)
As rubber soars, tyre makers may go for yet another hike
Posted: 04 Nov 2010 06:37 AM PDT
Tyre manufacturers are looking at hiking prices between 3% and 5% in the current quarter on account of continuous pressure of rising raw material costs.

JK Tyre & Industries has announced its intentions to increase the prices. “We have not decided the time and the percentage, but the next round of price hike is definitely in pipeline during this quarter,” said A S Mehta, marketing director, JK Tyre.

The company will hike prices between 3% and 5%, its fourth round of price increases this year. The company had raised prices in May, June and July.

During the announcement of company’s second-quarter results, Raghupati Singhania, vice-chairman and managing director, JK Tyre, told analysts, “It was a very challenging quarter, as the prices of raw material are increasing. The natural rubber prices have doubled from the last year with the overall increase in all raw material costs being 40%.”

Currently, rubber is selling at $4,200 per metric tonne. Tyre prices have been revised, but could not keep pace with the rapidly rising costs. However, we will undertake a price increase shortly.” Singhania said.

“Prices of essential components like natural and synthetic rubber, steel, carbon black are witnessing substantial surge,” said Mehta.
Balkrishna Industries, the specialty tyre manufacturer and exporter, said the company is looking at increase prices this quarter.

According to a company official, Balkrishna is the process of finalising the percentage of hike. While Japanese tyre major Bridgestone Tyres had already taken its third price jump in October. The other two were in April and July.

On the other hand, Ceat Ltd is planning to hold product prices through the next two months despite rubber rally. The company is trying to compensate the input cost surge through capacity additions at its Nashik plant and volume increase.

According to S P Singh, convenor of All India Tyre Dealers’ Federation, “The companies have been indicating on another round of price hikes. The continuous increase in tyre prices has been a pressing issue for the industry. Customers are unhappy and manufacturers are sending circulars to convince the customers.”

“The raw material prices for the tyre industry have gone up by 47% this year. However the companies were able to pass on only 37% of the overall increase. Strong competition with strong demand is limiting companies to take price hike decisions,” said Mahantesh Sabarad, Mumbai-based analyst at Fortune Equity Brokers.

Meanwhile, tyre makers are riding high on auto demand. According to Automotive Tyre Manufacturers’ Association, during April-August 2010, tyre companies produced a total of 47.1 million tyres as against 36.7 million in the same period last year, a rise of 28%. Companies are investing heavily on capacity expansion.

(dnaindia.com)