Spot rubber improves on supply concern

Spot rubber improves on supply concern


Kottayam, Nov. 11

Physical rubber prices improved on Thursday. Sustained rains and supply concerns were the key factors behind the current bull run and the prices firmed up further though there were no fresh enquiries from major consuming industries.

The volumes were dull. Among other news, natural rubber prices in Asia recorded an all-time high after a combination of dry and wet weather tightened the supplies in Southeast Asia, while demand from China and tyre makers such as Bridgestone, Michelin and Goodyear stayed strong. The current bull run is led neither by fundamentals nor technicals but purely by sentiments, said Mr. B.Rajasekharan, Planter, Analyst and Financial Consultant.

The market might experience sharp declines once the weather turns positive. Hence the traders are advised to book profits at least partially in each peak to avoid heavy causality during the succeeding bear spell which might hit at any time.

Sheet rubber improved to Rs 204 (203) a kg according to dealers. The grade was steady at Rs 203 a kg both at Kottayam and Kochi as reported by the Rubber Board.

In futures, the November series for RSS 4 slipped to Rs 205 (205.08), December to Rs 207.44 (208.24), January to Rs 209.55 (210.25) and February to Rs 211.90 (211.93) a kg on National Multi Commodity Exchange (NMCE). RSS 3 flared up at its November futures to ¥375 (Rs 202.03) from ¥365.6 a kg during the day session but remained inactive in the night session on the Tokyo Commodity Exchange (TOCOM). The grade (spot) improved further to Rs 198.55 (195.49) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 204 (203); RSS-5: 195 (194); ungraded: 191 (190); ISNR 20: 200 (199) and latex 60 per cent: 131 (131).



Soaring rubber prices prompt Lanxess to raise target

BERLIN (Commodity Online) : Soaring rubber prices prompted leading synthetic rubber manufactures Lanxess to lift its profits target for the second time this year.

The group, which vies with Exxon as world's second biggest maker of oil-based rubber, lifted its target for this year's earnings by 100 million euros to 900 million euros before interest, taxes, depreciation and amortization citing the strong car industry demand.

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The revision followed a 71% jump in ebitda in the July-to-September quarter as the company tapped significantly higher production by tyre manufacturers.

"The driver of this development was again China, the country with the largest tyre industry, which raised output by 15%," Lanxess said.

The group's performance polymers division, which includes most of its rubber interests, showed particularly strong profits growth, on sales up 50% at E986m.

While facing higher raw material prices, linked to the higher price of oil, the increase in costs "was passed along in full to the market".

The comments represent a marked turnaround in the fortunes of the company, which had introduced austerity measures including a reduced working week for staff, after world recession send demand plummeting last year.

And they came as natural rubber futures in Shanghai hit a record 38,400 yuan ($5,780) a tonne in Shanghai for a most-traded contract, currently the May lot.

In Tokyo, the world's flagship rubber market, the benchmark April lot soared to a 30-year high of $370.20 yen per kilogramme, equivalent to $4,525 a tonne.

Besides improved demand from carmakers, the commodity has been boosted by a squeeze on supplies caused by heavy rains, flooding and landslides in Thailand, the top producing country, with the eruption of the Merapi volcano raising concerns over output in second-ranked Indonesia.

The Association of Natural Rubber Producing Countries, whose members account for more than 90% of global output, will probably have to trim its expectation, already lowered once, of production growth of a good 5%, year-on-year, again because of [these] factors.

Furthermore, a forecast from the International Rubber Study Group of near-balanced supply and demand in natural rubber this year can hardly be maintained now.
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