Spot rubber rules steady

Spot rubber rules steady


Kottayam, Dec. 30

Spot rubber continued to rule almost steady on Thursday. Expectations on an improvement in arrivals during the ongoing peak production season kept the buyers on sidelines but the market managed to close unchanged lacking quantity sellers in major grades. The trend was partially mixed as RSS 5 lost ground on comparatively low demand and better supply.

Sheet rubber finished unchanged at Rs 206 a kg, according to traders. The grade weakened to Rs 206.50 (207) a kg both at Kottayam and Kochi, according to the Rubber Board.

Futures drop

RSS 4 declined with January series slipping to Rs 208.24 (209.43), February to Rs 213 (214.15), March to Rs 217.15 (218.18) and April to Rs 223.21 (224.21) a kg on the National Multi Commodity Exchange. The volumes totalled 4336 lots and open interest 8999 lots. The turnover was Rs.92.32 crore.

RSS 3 (spot) slipped to Rs 224.07 (224.13) a kg at Bangkok. The January futures for the grade weakened to ¥403.6 (Rs 222.62) from ¥404.5 a kg during the day session on the Tokyo Commodity Exchange (TOCOM).

Spot rates were (Rs/kg): RSS-4: 206 (206); RSS-5: 198 (199): ungraded: 195 (195); ISNR 20: 204 (204) and latex 60 per cent 138.50 (138.50).


Rubber Increases, Posting Second Annual Advance, on Supply Deficit Concern
THURSDAY, DECEMBER 30, 2010 ADMIN

Rubber extended gains to post a second straight annual advance on concern that a shortage may worsen early next year as top exporter Thailand enters a low- production period known as wintering.
The June-delivery contract added as much as 0.9 percent to 414.8 yen per kilogram ($5,094 a metric ton) on the Tokyo Commodity Exchange and closed at 414.5 yen, bringing this year’s gain to 50 percent. The bourse will be closed from tomorrow and resume trading on Jan. 4.
Latex production in Thailand is set to shrink as growers reduce tapping of rubber trees from February to April. The seasonal drop in output may worsen a supply shortage as global demand rises, led by car sales in China and India. Rubber climbed to a record 419.3 yen on Dec. 27.
“Concern over tight supply continued lending support to the market,” said Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo. A rebound in oil prices also pushed rubber higher, reversing its early 1.8 percent decline, Shigemoto said.
Crude oil for February delivery rose as much as 0.2 percent to $91.33 a barrel on the New York Mercantile Exchange after losing 0.4 percent yesterday. The contract touched $91.88 on Dec. 27, the highest level since Oct. 7, 2008.
Rubber futures declined earlier as China, the world’s biggest consumer, may take measures to curb speculation, said Toshimitsu Kawanabe, an analyst at commodity broker Central Shoji Co.
Supply Drop
China may increase the size of agricultural futures contracts in 2012 to curb speculation, the Shanghai Securities News reported today, citing no one. Contracts already being traded will expire by the end of 2011 and the new contracts are still being studied, the report said. Raising the sizes will increase the amount of capital required for trading and keep some speculators out of futures markets, it said.
Supply of natural rubber from nine producers representing 92 percent of global output is expected to fall 6.3 percent in the fourth quarter, cutting this year’s production growth to 5.7 percent, from 6.6 percent forecast in November, the Association of Natural Rubber Producing Countries said in its monthly bulletin.
Output from the association’s members is estimated at 9.42 million tons this year and may climb to 9.92 million next year, the group said.
May-delivery rubber in Shanghai advanced 0.8 percent to close at 36,545 yuan ($5,534) a ton. The price has retreated from a record 38,920 yuan on Nov. 11 amid concern that China may take steps to cool inflation and economic expansion.
The cash rubber price in Thailand was unchanged at a record 149.55 baht ($4.96) per kilogram today as persistent rains in the country’s southern provinces limit supplies, according to the Rubber Research Institute of Thailand’s website.
(Source: http://www.bloomberg.com/news/2010-12-30/rubber-declines-trimming-annual-increase-as-china-may-curb-speculation.html)



Rubber to remain highly volatile amid supply woes

KOCHI: After a year that saw natural rubber prices surge to record levels, consumers of the commodity would like to believe that the worst is over.
In fact, the key stakeholders in the sector are of the view that supply uncertainties and price volatility would turn out to be a rule rather than an exception in the year ahead.
The domestic prices of natural rubber rose by almost 50% to a record high of `207.50 per kg on last Thursday compared to the same period of the previous year. Supply concerns, both at the global as well as domestic levels, were the major factors behind the sharp acceleration in prices.
Even as the industry hopes that normalcy would return to the overheated rubber market across the world, there is a growing concern about the difficult days ahead. “2011 is likely to be yet another challenging year for natural rubber consumers,” said Neeraj Kanwar, vice chairman and managing director of Apollo Tyres. According to him, while in the short-term “the limited supply of natural rubber will cast a shadow on the price front, its long-term availability will be a key concern which needs to be addressed on priority”.
The supply uncertainties of rubber, a key industrial raw material, have been aggravated by the climatic changes happening across the key producing countries. A prolonged spell of rains disrupted production in India this year, leading to tight supplies and rising prices. Internationally, leading global producers like Thailand and Indonesia also had to cut back on production due to heavy rains and floods.
“2010 was a difficult and abnormal year,” said Rajiv Budhraja, director general of Automotive Tyre Industries Association (ATMA), adding that he hoped the coming year would be “balanced and normal”. “We hope that what has happened in 2010 would get corrected in 2011,” he added.
But not all are optimistic about the restoration of normalcy in the near future. Kottayam-based analyst and trader Biju John, proprietor of CPM Spices Corporation, said that the “rubber sector is entering the new year with low stocks”. According to him, “if changing climatic conditions lead to cut backs in production in 2011, the prices could go through the roof.”
CP Krishnan, director of Geojit Comtrade Ltd, a leading broking company, also said that “climatic factors and demand conditions could be the price setters in the coming days”. According to him, the international prices have shot past the domestic prices, making it all the more difficult for the user industries in the country. The estimated shortfall in supply during this fiscal is around 85,000 tonne.
Meanwhile, the government has allowed the industry to import 40,000 tonne at a concessional duty of 7.5% by March 31. After that the duty has been capped at 20% or `20 per kg. This has been the industry’s demand for a long time. However, currently, the international prices are higher, making imports unviable. The industry hopes to contract imports early next year for meeting the requirements for the lean season starting April. But the uncertainties in supply could send the industry’s calculations haywire


Demand perks up latex prices
Spot rubber prices were almost steady on Wednesday. The market lost its direction on buyer resistance, as major players were hesitant to enlarge their commitments, possibly expecting an improvement in domestic supplies. Meanwhile, latex 60%, the only gainer of the day, closed firm on fresh demand. The volumes were dull.
According to traders, sheet rubber finished flat at Rs 206 a kg, amidst scattered transactions. The grade firmed up to Rs 207 (206.75) a kg, both at Kottayam and Kochi, according to the Rubber Board.
Among other reports, the key Tokyo rubber futures recovered partially on short-covering due to supply concerns prior to the long holidays, as the exchange will remain closed from December 31 to January 3. The most active Shanghai May futures closed weak at 36,030 yuan a tonne, down from Monday's close of 37,110 yuan.
Futures up
In futures, the January series improved marginally to Rs 209.56 (209.32), February to Rs 214.12 (213.96), March to Rs 218.35 (217.96) and April to Rs 224.40 (223.99) a kg for RSS 4 on the National Multi Commodity Exchange.
RSS 3 (spot) closed at Rs 224.13 (224.04) a kg at Bangkok. The January futures for the grade increased to ¥ 404.5 (Rs 222.17) from ¥ 401.9 during the day session and then to ¥ 406.5 (Rs 223.27) in the night session on the Tokyo Commodity Exchange.
Spot rubber rates (Rs/kg) kg were: RSS-4: 206 (206); RSS-5: 199 (199); Ungraded: 195 (195); ISNR 20: 204 (204); and latex 60%: 138.50 (137)