Spot rubber zooms to Rs 235 a kg.

Spot rubber zooms to Rs 235 a kg


Kottayam, Jan. 21

Spot rubber changed hands at another record price on Friday. The market seemed to be following sharp gains on the Tokyo Commodity Exchange (TOCOM) and Bangkok, ignoring the marginal declines in domestic futures on the National Multi Commodity Exchange (NMCE). There were no quantity sellers or profit booking at higher levels even during closing hours and the prices ruled firm on fresh buying and short covering.

Among other reports, the key Tokyo and Shanghai rubber futures hit all-time highs as a weak yen against dollar triggered speculative buying while further gains were expected due to strong demand and short supplies.

Sheet rubber flared up to Rs 235 (229.50) a kg, according to dealers. The grade increased to Rs 234 (230) a kg as quoted by the Rubber Board.

FUTURES WEAKEN

RSS 4 weakened with February series slipping to Rs 238.02 (238.69), March to Rs 243.80 (244.81), April to Rs 252 (253.68) and May to Rs 258.32 (259.90) a kg for on the NMCE.

The January futures for RSS 3 improved to ¥476.8 (Rs 262.93) from ¥464.1 a kg during the day session but then slipped to ¥476 (Rs 262.49) in the night session on the TOCOM. The grade (spot) closed firm at Rs 261.87 (257.73) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 235 (229.50); RSS-5: 225 (223); ungraded: 220 (215); ISNR 20: 226 (224) and latex 60 per cent: 155 (155).




Jan. 21 (Bloomberg) -- Rubber futures in Tokyo and Shanghai reached records on concern that supply from Thailand, the top exporter, may decline, worsening a supply shortage, after the government issued a flood warning.
The June-delivery contract climbed as much as 2.7 percent to 478.1 yen a kilogram ($5,766 a metric ton) on the Tokyo Commodity Exchange and settled at 477.6 yen. The most-active contract climbed 5.1 percent this week, as demand expands on rising car sales led by China and India, outpacing weather- constrained supply.
Monsoon rains may cause flash floods and landslides in nine of Thailand’s southern provinces, the Department of Disaster Prevention and Mitigation said yesterday. The fourteen provinces in the south represent about 80 percent of the country’s total rubber output.
“The market is boosted by supply concern,” said Hisaaki Tasaka, an analyst at ACE Koeki Co. in Tokyo. “Thai shippers are bullish as weather conditions may worsen.”
The cash rubber price in Thailand reached a record 175.3 baht ($5.72) per kilogram today as supply shortages have lingered, while demand is increasing from the car industry, according to the Rubber Research Institute of Thailand. Some plantation areas have entered the low-production season, the institute said on its website.
“Buyers are still in the market despite high prices to secure the commodity amid increasing supply concerns,” said Wanwilai Choilek, manager at the Hadyai, Thailand branch of commodity broker DS Futures Ltd.
Output during the low season, which runs until May, can fall by 45 percent to 60 percent from the peak, according to the Association of Natural Rubber Producing Countries. The period occurs at the same time in northern Indonesia and Malaysia.
China Stockpiles
Futures also gained amid speculation that buyers in China, the largest consumer, may boost purchases to replenish reserves before the Lunar New Year holiday, Tasaka said. The week-long holiday starts Feb. 2.
Natural-rubber inventories in China declined 175 tons to 68,675 tons, based on a survey of 10 warehouses, the Shanghai Futures Exchange said Jan. 14. That’s 55 percent lower than last year’s peak of 151,832 tons.
China’s economy expanded 10.3 percent in 2010 to 39.8 trillion yuan ($6.04 trillion), the fastest pace in three years, the statistics bureau report showed yesterday. That compares with 9.2 percent in 2009.
China’s vehicle sales may grow 10 percent to 15 percent this year after jumping 32 percent to 18.06 million vehicles in 2010, according to forecast by the China Association of Automobile Manufacturers.
The May-delivery contract in Shanghai advanced as much as 2.1 percent to 40,985 yuan ($6,224) a ton.



Maruti hikes prices of vehicles by up to Rs 8,000

NEW DELHI: Giving in to rising input cost pressures, the country's largest carmaker by sales, Maruti Suzuki India has increased prices of its vehicles by up to Rs 8,000 across models, except its newly launched compact car Alto K10 .
"Yes, we did increase the prices on January 17 ranging between 0.5 per cent and 2.2 per cent," Maruti Suzuki India managing executive officer (Marketing and Sales) Mayank Pareek said.
Except the new hatchback Alto-K10, the price hike will translate into an increase of price between Rs 1,000 and Rs 8,000 across different models made by the company.
The company had in December last year said it would increase prices during January as the rising input costs, especially that of commodities have become unbearable.
"The price of natural rubber, which used to be Rs 100 per kg, has gone up to Rs 200 per kg. Copper price has increased by 12-15 per cent and steel has also seen a similar increase," Pareek had said then.



Rubber prices at record high on global cues

NEW DELHI: Continuing its gain for the third straight week, natural rubber prices on Thursday touched all time high of Rs 230 per kg on strong global cues.
Prices of natural rubber, a key component for making tyres, on Thursday closed at Rs 230 per kg in Kottayam and Ernakulam, which accounts for 90% of the country's production.
According to industry sources, the rally in natural rubber prices is due to the surge in prices of the commodity in the international market. Natural rubber prices in the global market touched a fresh high of Rs 250 per kg as strong demand from China and the US is fuelling the prices of the commodity.
A surge in demand from the US on the back of better-than-expected growth in the automotive segment is further pushing the global prices of the commodity and the impact is also felt on the domestic market, said an expert. India's production of natural rubber in 2010 is estimated at around 8.5 lakh tonnes, whereas the total demand for natural rubber in the country is nearly 10 lakh tonnes per annum.



Tokyo, Shanghai Futures Hit Records; More Upside Seen

Key Tokyo and Shanghai rubber futures hit record highs on Friday (January 21) as a weaker yen against the dollar prompted speculators to boost buying, with further gains expected due to strong demand and supply shortages.
The key Tokyo Commodity Exchange rubber contract for June delivery was up 8.3 yen, or 1.8 percent, at 474.0 yen per kg as of 0230 GMT after setting a record high of 475.5 yen.
"The benchmark contract could rise further, tracking strong gains in Shanghai, as a trend for the yen's depreciation against the dollar has started to emerge," said a trader.
Japanese traders have said TOCOM futures could even hit 500 yen in the next month as the wintering season begins in producing countries and reduces output.
The most active Shanghai rubber futures contract for May delivery was changing hands at 40,305 yuan per tonne as af 0232 GMT, up from Thursday's (January 20) close of 40,130 yuan, after climbing to a historic record 40,520 yuan. Volume was 329,617 lots.
Natural rubber changed hands at another record in Asia, just a few cents away from $6 a kg, as fears of tight supply persisted and dealers covered stocks in anticipation of more purchases from tyre makers, industry sources said.
Oil prices slumped about 2 percent on Thursday (January 20) on a sell-off sparked by an unexpected rise in U.S. crude stockpiles and worries that China might tighten monetary policy to fight inflation.
The dollar hit one-week highs against the yen and was last trading around 83 yen.
Asian physical rubber prices were offered higher on Thursday (January 20) as futures prices on the Shanghai market hit a record high, with supply remaining thin from big producing countries, dealers said.
Oil and copper dropped sharply and gold slipped on Thursday (January 20) as investors worried that China will move to cool its booming economy, the engine of growth in commodity demand this decade.
Stocks fell on Thursday (January 20) as lacklustre tech and materials earnings failed to live up to heightened expectations, threatening to short-circuit a seven-week run.
General Motors Co said it is investing $540 million in its motor plant in central Mexico to build more fuel-efficient engines for the recovering North American automobile market.
(Reuters, January 21, 2011)



Rubber gains on tight supply

Rubber yesterday traded with the positive node and settled 1.92% up at 23890 as a flood warning in Thailand, the world’s largest supplier, spurred purchases, raising concerns that shortages of the commodity used in tires may worsen.
Rubber production in Thailand during the season, which runs until May, shrinks by 45 percent to 60 percent from peak production, the Association of Natural Rubber Producing Countries has said.
The low-production period occurs at the same time in northern Indonesia and Malaysia, lowering output, the group said. In yesterday's trading session Rubber has touched the low of 23400 after opening at 22410, and finally settled at 23890.
For today's session market is looking to take support at 23562, a break below could see a test of 23233 and where as resistance is now likely to be seen at 24057, a move above could see prices testing 24223.
Trading Ideas:
Rubber trading range is 23233-24223.
Rubber gained as a flood warning in Thailand spurred purchases
Rubber daily stocks at Shanghai exchange came down by 270 tonnes
Spread between Rubber FEB & MAR contracts yesterday ended at 625.00. Spread yesterday traded in the range of 576 to 1665.
RUBBER STILL LOOKING FIRM BUT MARKET IS OVERBIT WILL WAIT FOR FRESH ENTRY.
NMCE accredited warehouses Rubber stock rosed by 79kgs to 10133kgs.



Everyone's rushing to grow rubber

Here's some good news. Rubber farmers are rich, judging from a car-buying spree in the rubber-growing provinces of Surat Thani and Songkhla, where almost 1,000 cars were sold in just one day last week.
Next, Deputy Agriculture and Cooperatives Minister Supachai Phosu announced a plan to give free rubber saplings plus other grants to new rubber farmers under the government's plan to increase the acreage of rubber plantations by 800,000 rai within three years.
That good news is followed by bad news, however. Forestry officials cut down and cleared away over 500 rai of rubber plantations in Ranong and Phitsanulok because they were located in protected forest areas.
They also threatened to fell more rubber trees once the Royal Forestry Department wins eviction cases against plantation owners who encroached on forest land.
The two sides of the same issue are no coincidence.
What links them is the record-high rubber price, which hit 159 baht a kilogramme at the main rubber market in Songkhla yesterday.
It's okay for rubber growers to enjoy the new high after having long endured the falling price of rubber.
But the government, especially the Agriculture and Cooperatives Ministry, must not get carried away by the lucrative income. The demolition of rubber plantations by forest rangers last week hinted that something "might go wrong" with the rapid expansion of rubber cultivation during the rubber price rally.
A senior forestry official who led the rubber demolition operation in Ranong's Kra Buri district said the surge in rubber price had led to widespread forest encroachment by rubber farmers and agribusiness operators.
A similar situation had occurred in Phitsanulok province where almost 500 rai of a watershed forest in Nakhon Thai district had been encroached upon by rubber planters.
Forest encroachment is not the only problem resulting from rapid expansion of rubber cultivation areas. There is also the issue of food security surrounding the transformation of food crop farming to growing non-edible cash crops.
Another issue to watch is corruption in the government's scheme to increase rubber cultivation, which involves a multi-billion-baht budget for rubber saplings procurement and grants for other farm materials.
The 1.44-billion-baht rubber saplings procurement scandal, in which 44 state officials and businessmen were charged with malfeasance, should be a big warning to the Democrat Party-led government.
The notorious rubber sapling procurement was part of the Thaksin administration's policy to expand rubber cultivation to one million rai between 2003-2006.
The deputy agriculture minister said the ministry would spend a budget of 580 million baht in the first year of the three-year rubber cultivation expansion scheme, which was endorsed by the cabinet last month and will officially kick off next month. Of the 800,000-rai target, 500,000 rai will be in the Northeast; 150,000 rai in the North; and 150,000 rai in the Central, East and South.
He expects a total of 160,000 farmers to join the scheme and the ministry will soon call a bid for the production of rubber saplings for distribution to farmers.
Mr Supachai claimed that the project is a "win" for all involved. Farmers will have more money in their pockets, the government will earn more revenue and more jobs will be created.
He even boasted that an increase in rubber plantation is good for the environment as it "helps increase rain volume and reduce global warming". The deputy minister seems not to care or is aware of undesirable effects from the scheme.
But the rubber plantation expansion must not go ahead until the government comes up with concrete measures to prevent forest encroachment, sustain food security and guarantee farmers - not giant agribusiness firms - that they will benefit from this scheme.
Things are not as simple as Mr Supachai thinks when it comes to the rubber issue. The government cannot simply say something like: "Rubber prices are up, folks. Let's grow more rubber trees!".



Tokyo and shanghai rubber futures strike record highs

Tokyo (january 21, 2011) : key tokyo and shanghai rubber futures hit record highs on thursday as speculators bet heavily on strong demand and supply shortages in the future. the key tokyo commodity exchange rubber contract for june delivery settled down 0.4 percent, or 1.7 yen, at 465.7 yen per kg after striking a record high of 470.4 yen.
the most active shanghai rubber futures contract for may delivery climbed as high as 40,220 yuan ($6,110) per tonne on thursday, exceeding the previous peak of 39,980 yuan hit the day before. the contract closed up 210 yuan at 40,130 yuan, with volume inching up to 788,972 lots.
japanese traders have said tocom futures could hit 500 yen in the next month as the wintering season begins in producing countries, causing reduced output. bad weather over the past few months has delayed the stocking of rubber needed during the wintering season, adding to supply concerns, they have said.



India rubber prices may climb on auto sector demand

CHENNAI (Commodity Online) : With just three months left in the current fiscal, tyre companies in India can import only a maximum of 40,000 tons of rubber while the deficit is estimated at 1,00,000 tons. Needless to say, prices of natural rubber are northbound.
The prices shot up double the previous year figures to almost Rs 250 a kg this year. Mining, pharma (gloves), surgical, footwear and other related industries are also in need of natural rubber.
Government had recently brought down import duties from 20% to 8%. Even this measure could not stave off price surge.
Vinod Simon, president of All India Rubber Industries Association (AIRIA) told Financial Express on the sidelines of the 6th Rubber Expo in Chennai, "Our objective is to ensure availability of the commodity rather than look at prices at this point of time.”
India is the second largest consumer of natural rubber after China, while it ranks fourth in production at 9.5 lakh tons . Thailand produces 3.6 million tons; Indonesia, a decent 2.5 million tons and Malaysia another 1.7 million tons.
Simon stressed on finding out more options to increase rubber acreage and escalate production. Recently, states like Tripura were identified to have conditions supporting rubber cultivation.
He said synthetic rubber production, currently at 2.5 lakh tons is yet to make a difference to prices as a substitute.
For the time being, Chinese demand of natural rubber is equal to the rubber output of Thailand at 3.6 million ton per annum. The government there is doing all it can to help the domestic industry with imports.
The per capita consumption of natural rubber in India is 1 kg as against 12 kgs of other developed countries. At the time of filing this report, the February contract of rubber was trading a tad lower by 0.17% at Rs.23405



Natural rubber prices at record high on global cues

NEW DELHI: Continuing its gain for the third straight week, natural rubber prices on Thursday touched all time high of Rs 230 per kg on strong global cues.
Prices of natural rubber, a key component for making tyres, today closed at Rs 230 per kg in Kottayam and Kochi, which accounts for 90 per cent of the country’s production.
According to industry sources, the rally in natural rubber prices is due to the surge in prices of the commodity in the international market.
Natural rubber prices in the global market touched a fresh high of Rs 250 per kg as strong demand from China and the US is fuelling the prices of the commodity.
“International prices are at record high level and are likely to remain at that level in near future due to strong demand,” Indian Rubber Dealers Federation Treasurer Mr Ibrahim Jalal has said.
Domestic prices are following the international trend, he added.
A surge in demand from the US on the back of better—than—expected growth in the automotive segment is further pushing the global prices of the commodity and the impact is also felt on the domestic market, said an expert.
However, the present rally in the prices of commodity is due to the global cues as the supply situation in the country has improved, Mr Jalal said.
India’s production of natural rubber in 2010 is estimated at around 8.5 lakh tonnes, whereas the total demand for natural rubber in the country is nearly 10 lakh tonnes per annum. – PTI