Rubber Production to Gain 8% in 2011, Association Predicts
Output of natural rubber from so- called key producing countries is forecast to grow 8 percent to 10 million metric tons in 2011, the Association of Natural Rubber Producing Countries said in a monthly bulletin. The group’s members account for 92 percent of global production.
Natural-rubber supply from key growers may expand 6 percent in the first quarter as high prices attracted farmers to tap trees during the low-output season, the bulletin said.
Demand for natural rubber in China, India and Malaysia, which account for 48 percent of global usage, is expected to increase this year, the bulletin said. Demand in China, the largest user, may gain 9.1 percent to 3.6 million tons; India’s usage may gain 5 percent to 991,000 tons and consumption in Malaysia may rise 7 percent to 490,000 tons.
Rubber futures in Tokyo have gained 15 percent this year, extending last year’s 50 percent rally, as rising car sales led by China and India boost demand. The price reached an all-time high of 537.7 yen per kilogram on Feb. 18.
CII advocates for investment in rubber sector of Tripura
Agartala, Feb 25 : Confederation of Indian Industry (CII) strongly advocated for investment in Tripura rubber sector considering the strategic location of the state with upcoming linkage with Chittagong port of Bangladesh, which would make the state as gateway to South East Asia market.
Speaking at the Tripura Rubber Convention here today, Senior Director and Head of Development Initiatives, CII, Indrani Kar said that the business opportunities for setting up rubber processing units in Tripura had bright future because of recent bilateral agreements between India and other neighbouring countries.
''The convention focused on making rubber industry a catalyst in improving the socio-economic set up of the down-trodden grower and business communities that enabling investors to consider Tripura as an important destination and access to intermediary and cost effective processing technologies,'' Ms Kar underlined.
In view of the area under plantation together with the growth positional and rubber production trend, Tripura had become as second rubber capital of the country and the development of Rubber Park near Agartala had also boost the value addition of natural rubber at highest degree, Mr Kar pointed out.
She, however, asserted that CII was already in the process to tap export market of Bangladesh, Myanmar and other South Asian countries for Tripura rubber and there were ample opportunities of foreign investment in rubber sector, as Tripura has various subsidies on investment including cent percent excise duty exemption.
NMCE Rubber tumbles on short selling
NMCE rubber futures extended the bearish trend on strong selling interest for 5th consecutive session on Thursday. On opening itself prices traded down on heavy selling pressure. TOCOM rubber futures also traded down settled on negative note at ¥ 473 per Kg. on strong selling pressure.
Rising economic tension in Middle East further added to the down side. Domestic spot market further fell by `300 per quintal. Thus, on cues from domestic and international market NMCE rubber futures ended on negative note.
The rubbers futures are projected to witness volatility today on overall bearish sentiments prevailing market. However, prices are likely to show small recovery today on short covering.
TOCOM rubber July futures are trading slightly lower at ¥ 477.90 per Kg. Moreover, Middle East concern are now easing down which may support the prices to give a pull back. Thus, on cues from above stated factors rubber futures are likely to witness a recovery today however overall trend will remain weak.
Factors to Watch For
The stock of natural rubber in the country till January 30, 2011, is estimated at 3,27,115 tons, according to chairman of Rubber Board of India
According to the Rubber Research Institute of Thailand, the physical price of Thai rubber dropped 0.9 percent to 195.80 baht ($6.42) a kilogram yesterday
People’s Bank of China has increased the interest rate by 50 basis which is pressurizing the rubber prices as China is the largest consumer of natural rubber
Natural-rubber inventories monitored by the Shanghai Futures Exchange is reported around at 58,058 tons, which is down by 62 % from last year’s highest inventory levels of 151,832 tons
According to the Association of Natural Rubber Producing Countries, Natural-rubber consumption in China and India may rise 9 percent to 3.6 million tons this year and 5.2 percent to 991,000 tons respectively
According to Passenger Car Association, passenger-car sales increased 16.2 percent Y/Y to 1.53 million last month
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February contract, prices, volumes and open interest all are falling. If the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions. Technicians view this scenario as a strong position technically because the downtrend will end as all the sellers have sold their positions, creating fresh buying opportunity at lower levels.
Japan Futures (TOCOM)
The TOCOM active June contract, prices, volumes and open interest all are falling. If the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions. Technicians view this scenario as a strong position technically because the downtrend will end as all the sellers have sold their positions, creating fresh buying opportunity at lower levels.
Shanghai Futures (SHFE)
The SHFE active June contract, prices are falling while volumes and open interest are rising. If prices are in a downtrend and open interest is on the rise, chartists know that new money is coming into the market, showing aggressive new short selling. This scenario will prove out a continuation of a downtrend and bearish conditions.
Thai rubber exports in 2011 seen to double in value on soaring world price: Official
POTENTIAL OF THAI NORTHEASTERN REGION
Rubber plantations, traditionally seen only in the south of Thailand, have in recent years sprung up in the northeastern region of the country.
And Luckchai, whose Thai Xua started planting rubber trees in the northeast in 1995, saw a high potential of this region, the driest and poorest of the country.
He said 41,600 square kilometers of land in the northeast could be used for planting rubber trees, while currently only less than 11.5 percent, or 4,800 square kilometers, are of rubber plantations.
He believed that because of the attractive price, more farmers in the northeast would turn to plant rubber trees.
"I'm confident that the northeast has a high potential," the president of the Thai Rubber Association said. "Perhaps in the next 20-30 years, this region could become a bigger producer than the south."
Demand of rubber surged in particular from its usage to produce auto tires in China, which consumes 27 percent of world's demand.
Luckchai, whose Thai Hua trades rubber with China, said the Chinese consumption rose to three million tons in 2010, the world' s largest now, from about 1.1 million tons in 2001.
Global demand of natural rubber in 2011 is estimated at 11 million tons.
Luckchai said China superseded the United States as the world's largest rubber consumer in 2001, when its demand exceeded one million tons while that of the U.S. dropped below that mark.
"If Chinese demand continues to grow by leaps and bounds like this, the production will remain insufficient," he said.
And the world's production -- 70 percent of which comes from the big three producers, which are Thailand, Indonesia and Malaysia -- is under even higher pressure from the surging economy of India.
"If the Indian economy continues to grow like the Chinese, or just half of its pace, the production will become even more inadequate," Luckchai said.
NMCE Rubber fall to continue
FRIDAY, FEBRUARY 25, 2011
AHMEDABAD (Commodity Online): Rubber is in primary uptrend but it has made triple top on its daily chart near 24790 and today Rubber has broken its strong support of 22200 at NMCE, the bourse where Rubber is a major commodity to reckon with.
Rubber opened 21900 and after making high of 22999 it is currently trading near 22000. Rubber looks weak and prices are expected to correct which has support around 20680.
“Technically, Intraday traders can sell rubber below 21700 with the stop loss of 21950,” said Bharti Navlani, Technical analyst with Commodity Online.
Plan for rubber tree replanting
PUTRAJAYA: The Plantation Industries and Commodities Ministry will propose to the cabinet for the replanting of 40 ha rubber trees per year to meet strong demand.
Its Minister Tan Sri Bernard Dompok said his ministry would also propose 13,000 ha of new plantation annually to increase rubber production.
“We are trying to increase the production of rubber by replanting,” he said after the exchange of agreements between Malaysian Rubber Board (MRB), Felda Rubber Industries Sdn Bhd and Mardec Bhdyesterday.
“We will propose the plans to the cabinet as soon as possible and hopefully get a concrete decision before the end of next month,” said Dompok.
Malaysia currently has 1.2 million ha of rubber plantation, of which 80% is in production.
Dompok said the country now produced less than one million tonnes of rubber a year.
He hopes to double the production to two million tonnes by 2020.
Earlier in his speech, Dompok said Felda Rubber Industries and Mardec have been selected as recipients of technology transfer and commercialisation for two advanced rubber products – ekoprena and pureprena – developed by MRB.
He said the commercialisation would enable both Felda Rubber Industries and Mardec to produce ekoprena and pureprena with an initial capacity of 12,000 tonnes a year and up to a target capacity of 300,000 tonnes annually by 2020.
He said the project was expected to result in gross national income totalling RM1.3bil and create 1,000 jobs by 2020.
Ekoprena is a form of epoxidised natural rubber obtained by the epoxidation of natural rubber latex.
Dompok said ekoprena, an established class of specialty rubber, was regarded as a green material for rubber product-manufacturing industry, particularly in tyre-making sector, as it was produced from a renewable natural source.
Pureprena is a highly purified natural rubber and an eco-efficient form of deproteinised natural rubber with distinguised raw rubber properties for dynamic and engineering applications.
Tokyo Futures Ease On Profit-Taking Supply Worry Supports
FRIDAY, FEBRUARY 25, 2011
Key Tokyo rubber futures fell on Friday (Feb 25) as investors took profits after recent high prices, but supply concerns continued to provide support.
The benchmark rubber contract on the Tokyo Commodity Exchange for August delivery, which debuted on Wednesday (Feb 23), fell 3 yen or 0.6 percent to 475.8 yen per kg as of 0029 GMT.
The contract fell as low as 469.3 yen on Thursday (Feb 24), the lowest since Feb. 2.
The most active Shanghai rubber futures for May delivery closed on Thursday (Feb 24) at 38,355 yuan per tonne, down from Wednesday's (Feb 23) close of 39,530 yuan. The contract hit a record high of 43,500 yuan on Feb. 9.
U.S. crude futures were up on Friday (Feb 25). Brent crude sank from 2-½ year highs near $120 a barrel in strong, late-day profit-taking following an unsubstantiated rumour Muammar Gaddafi had been shot and Saudi Arabia's assurances it can counter Libyan supply disruptions.
The dollar nursed heavy losses early in Asia on Friday (Feb 25), hovering above a record low versus the Swiss franc as investors sought safety in other currencies on fears the unrest in Libya will spread to other oil producers.
(Reuters, February 25, 2011)
Tyre Companies Appeal For More NR Imports in India
FRIDAY, FEBRUARY 25, 2011
The tyre industry has appealed the finance minister for import of 200,000 tonnes of natural rubber (NR) in 2011-12 in order to bridge the gap between domestic consumption and production in India. In a pre-Budget submission to the finance minister, the Automotive Tyre Manufacturers Association (Atma) has also demanded customs duty waiver on raw materials like butyl rubber and styrene butadiene rubber (SBR), which are not produced domestically.
It has also demanded reduction in customs duty on raw materials where domestic supply is short of demand, like steel tyre cord, rubber chemicals and polyester tyre cord.
At present, butyl rubber attracts a duty of five per cent and other raw materials which are not produced in India attract a duty of 10 per cent.
Steel tyre cord total domestic production is 10,000 tonnes while its consumption is 25,000 tonnes. Nylon tyre cord production is 63,695 tonnes, while the demand is 115,000 tonnes and 35,000 tonnes of rubber chemicals are produced in the country while demand is 42,000 tonnes. So the tyre industry is in serious trouble due to the low availability of raw materials and its steep price rise.
The industry is raw material intensive and this accounts for 62 per cent of the total industry turnover and 70 per cent of the total production cost. NR accounts for 42 per cent of the total raw material cost.
The percentage increase in the price of NR during the last six months was 41 per cent and even at the record price level the industry finds it difficult to get rubber.
The current price of RSS-4 grade rubber is Rs 238 a kg. Atma also pointed out that the net profit of the tyre companies is on the decline and expected to slide further in the last quarter of the current financial year.
The net profit as a percentage of net sales has come down from 6.39 per cent in October-December period of 2009 -10 to 3.14 per cent in the same period of the current financial year. The industry has a turnover of Rs 30,000 crore with an export basket of Rs 3,600 crore.
Reuters adds: Global tyre makers bought some quantity of Indonesian rubber and demand from trading houses in Southeast Asia also stirred up trading, but main consumer China was on the sidelines although physical prices had dropped from record highs, dealers said on Thursday (Feb 24).
Indonesian SIR20 was traded on Thursday (Feb 24) at 244 US cents a pound ($5.38 a kg) for May shipment. Late on Wednesday (Feb 23), SIR20 for April delivery changed hands at 245.00 and 246.50 cents a pound ($5.40 and $5.43 a kg), with buyers including Japan's largest tyre maker Bridgestone.
(Business Standards, India, February 25, 2011).
Sheet rubber declines on buyer resistance
KOTTAYAM, FEB. 24:
Domestic rubber prices continued to remain under pressure on Thursday. In spot, prices dropped further on buyer resistance amidst selling from dealers and growers. According to sources, the market seemed to be experiencing a visible improvement in arrivals as the prices began to slip beyond expectations. Scattered rain during the past couple of days prompted growers to sell at least a part of their stocks expecting extended tapping days.
Sheet rubber declined to Rs 225 (230) a kg, according to dealers. It closed weak at Rs 228 (231) a kg, as reported by the Rubber Board.
In futures, the March series surrendered to Rs 219.80 (228.95), April to Rs 229.51 (239.07), May to Rs 235.26 (245.06), June to Rs 241.27 (251.32) and July to Rs 241.92 (252.00) a kg for RSS 4 on the National Multi Commodity Exchange.
The volumes totalled 21384 lots and open interest 11494 lots. The turnover was Rs 486.94 crores.
RSS 3 (spot) slipped further to Rs 288.02 (289.31) a kg at Bangkok. The March futures for the grade inched up to ¥515 (Rs 286.25) from ¥514.4 during the day session but then remained inactive in the night session on the Tokyo Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 225 (230); RSS-5: 222 (225); ungraded: 218 (220); ISNR 20: 227 (230) and latex 60 per cent: 143 (145).
Tokyo futures hit three-week low
FRIDAY, FEBRUARY 25, 2011
Bangkok (february 25, 2011) : tokyo rubber futures fell 1.7 percent on thursday as investors continued to take profits from recent record highs, but tight supply and strong oil prices should provide support, dealers said. the benchmarkrubber contract on the tokyo commodity exchange for august delivery fell 8.5 yen to settle at 478.8 yen ($5.80) per kg. it fell as low as 469.3 yen, the lowest since february 2.
"there was another round of profit-taking as players as well as investment funds thought that the market was overbought," one dealer said. but dealers said rubber prices could recover on friday after prices found strong support at 475 yen per kg, and tight supply in producing countries should provide fundamental support. oil prices hit a fresh 2-1/2-year peak on thursday on concern the bloody unrest that has cut more than a quarter of opec member libya's crude output could spread to other major producers, including top exporter saudi arabia.
Dip in rubber futures won't grow into a correction
FRIDAY, FEBRUARY 25, 2011
A slip in rubber futures, which extended to 12% their tumble from last week's record high, does not herald a correction, as strong growth in Chinese and Indian car sales erodes stocks further this year.
Commerzbank analysts forecast rubber prices will "likely remain at a high level", noting that 2011 looked set to be the fourth year in the last five in which demand for the tyre ingredient will exceed production.
At Phillip Futures in Singapore, Ker Chung Yang said a fall in Tokyo's benchmark August rubber contract, which fell to a three-week low of 473.00 yen a kilogramme in Thursday's afternoon session, was viewed as "healthy" in the market, given that the commodity had been technically overbought.
"Since fundamentals have not changed much with major producer Thailand in the wintering season, Tokyo rubber may retest 500 yen a kilo again," Mr Ker said.
The fall in rubber futures also appeared to contradict usual market logic in which prices move in line with oil, the raw material for synthetic alternatives.
However, high oil prices, which for Brent crude topped $117 a barrel on Middle East unrest, could also dent the demand for cars which has driven rubber's rally of more than 60% over the last six months.
Supply gap
Indeed, Commerzbank's assessment was based on estimates from the International Rubber Study Group that demand will rise by 4.6% to 11.2m tonnes this year, as demand for vehicles soars among Asia's enriched consumers.
Chinese carmakers expect sales growth of 10-15% in domestic sales this year, with Indian peers forecasting a 23% rise their production.
Rubber consumption in these countries will grow by 9% and 5.2% respectively, the Association of Natural Rubber Producing Countries believes.
Meanwhile, the association believes that output among its members, which account for the great majority of world production, will rise by 4.8% to a little under 10m tonnes, held back by heavy rains brought by the La Nina weather pattern.
The supply squeeze is being exacerbated at the moment by the entry of Thailand, the top producer, into a seasonal downturn, which last under April, when rubber trees shed their leaves and latex volumes fall to half peak levels.
"No news which would ease the situation is evident on the supply side, at least for the moment," Commerzbank said.
'Significant margin pressure'
The comments will lower hopes for tyremakers of a relief from the rise in raw material costs which Goodyear blamed for driving it into a fourth-quarter loss.
French rival Michelin two weeks ago said that rising rubber costs would have a E1.5bn impact on operating income by this year, although it expected to recoup most of this through higher product prices.
Nonetheless, Fitch Ratings, in a report earlier this week, warned that tyremakers faced "significant margin pressure".
"Even after factoring in limited substitution of synthetic rubber in the tyre-making process, further tyre price increases appear necessary in 2011," Fitch analysts said.
Tyre cos seek 2 L tonne duty-free rubber import
FRIDAY, FEBRUARY 25, 2011
The tyre industry has asked for duty-free imports of 2 lakh tonne of natural rubber (NR) for 2011-2012 to bridge the gap between demand and supply.
“We estimate the demand-supply gap in domestic natural rubber production and consumption to be approximately 2 lakh tonne in next fiscal (2011-12). Therefore, we want the government to allow duty-free import of natural rubber to the bridge the gap between domestic NR availability and consumption on a regular basis”, Neeraj Kanwar, chairman Automotive Tyre Manufacturers Association (ATMA), said.
ATMA has also sought waiver of customs duty on all raw materials not manufactured domestically. These include butyl rubber, ethylene propylene non-conjugated diene rubber (EPDM) and styrene butadiene rubber (SBR).
Regarding other key raw materials including PBR, steel tyre cord, nylon tyre cord, rubber chemicals and polyester tyre cord, ATMA has suggested lowering of import duties. “The domestic shortfall on these items ranges from 20% to 60%, making imports inevitable”, Kanwar says.
Raw material cost accounts for about 62% of tyre industry turnover and 70% of the production cost. According to ATMA, measures to improve raw material availability need priority. ATMA also urged the finance minister to end “the unfair trade practice of dumping tyres by increasing customs duty on imports.
In the recent years, there has been a large scale import dumping of tyres from China. “Though basic rate of customs duty on tyres is 10%, tyres can be imported at a lower rates of customs duty under various regional trade agreements. For instance tyre imports from China and South Korea account for over 70% of total tyre imports into India since the effective rate of basic customs duty works out to only 8.6%. The truck and bus tyre imports have gone up by around 35 % in 2010-11 over 2009-10 when calculated on annualised basis. In case of passenger car tyres, the imports are up by around 40% during this period.
“We count on the coming Union Budget to jack up the customs duty rates on tyre imports to stop the dumping of Chinese tyres,” says Kanwar.
Car Prices May Rise Up To Rs 25,000 Due To Higher Commodities Costs in India
FRIDAY, FEBRUARY 25, 2011
Car companies are likely to raise prices by up to 2-3% next month, translating into an effective increase of around 10,000 for cars such as Maruti Swift , Hyundai i20 and Honda Jazz in India. The premium models like Toyota Camry or Skoda Superb will be costlier by over Rs 25,000.
"There is immense pressure to increase prices as key commodities like steel and rubber have touched all-time high in recent months. While the negotiations for our new long-term supply contract are underway, suppliers are quoting much higher prices," S Maitra, managing executive officer (supply chain) Maruti Suzuki said.
The company had raised prices by up to 2.4% in January for most of its cars to contain increasing input costs.
The auto sector has seen major rise in raw material costs as high consumption commodities such as steel, rubber, aluminium, copper, nickel have gone up in the range of 20-45% in November-February months over the same period last year. Hit by higher commodity prices, Automobile majors such as Maruti Suzuki and Hero Honda posted 20% decline in year-on-year net profit for the October-December quarter.
Other companies are also toying with the idea even if they are not willing to comment officially on price hike. "We haven't taken a final call yet, though input cost pressures are going beyond our control," a senior executive of Hyundai Motor India said.
The Japanese carmaker Toyota Kirloskar Motors would review the price next month. "We evaluate our price position on three-month basis and any price rationalisation could happen only next month," Toyota Kirloskar deputy managing director (marketing) Sandeep Singh said.
The price indications come at a time when the government itself is contemplating a 2% hike in excise duty across the auto sector to take it to the pre-stimulus level of December 2008. The government's decision to hike excise will automatically force all auto companies to pass on the cost to customers in the same ratio.
(The Economic Times, India, February 25, 2011)
Sunday, February 27, 2011
Friday, February 25, 2011
Panic sales sap spot rubber
Panic sales sap spot rubber
THURSDAY, FEBRUARY 24, 2011 ADMIN
KOTTAYAM, FEB. 23:
Physical rubber prices fell further on Wednesday. Sharp declines on the National Multi Commodity Exchange kept traders under pressure during early trades but prices managed to sustain at the prevailing levels following a partial recovery in domestic futures. RSS 4 was hit badly as buyers stayed back letting the grade to fall freely on an almost panic selling from dealers and growers.
Sheet rubber nosedived to Rs 230 (237) a kg, according to traders. The grade declined sharply to Rs 231 (238) a kg both at Kottayam and Kochi, as quoted by the Rubber Board.
RSS 4 surrendered at its March series to Rs 229.20 (232.56), April to Rs 239.01 (241.89), May to Rs 245.50 (247.91), June to Rs 250.36 (253.36) and July to Rs 252 (254.66) a kg on the NMCE.
The March futures weakened to ¥514.4 (Rs 280.94) from ¥521.8 during the day session but then recovered to ¥521.6 (Rs 284.85) a kg in the night session on the Tokyo Commodity Exchange. RSS 3 (spot) slipped to Rs 289.31 (292.05) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 230 (237); RSS-5: 225 (230); ungraded: 220 (225); ISNR 20: 230 (238) and latex 60 per cent: 145 (146).
Natural rubber prices fall by Rs 7 in the domestic markets
THURSDAY, FEBRUARY 24, 2011
New Delhi, Feb 23 (PTI) Natural Rubber prices today fell by Rs seven to Rs 231 per kg in the domestic market due to fall in the prices in the International and domestic future markets.
The prices of natural rubber yesterday at the Kottayam market were ruling at Rs 238 per kg.
"Fall in prices of rubber in the international market, Tokyo Commodity exchange (TOCOM) and in the domestic market has affected the prices in the physical markets here," Indian Rubber Dealers Association President George Valy told PTI.
"Internationally there is lot of voltality in the prices of rubber," Valy added.
Prices of natural rubber in the Bangkok market closed at Rs 289.31 per kg as against Rs 292.05 per kg yesterday.
"The prices in the domestic future markets have been affected due to a fall in the prices in TOCOM," National Multi Commodity Exchange Chief Executive Office Anil Mishra told PTI.
"The prices of rubber at Shanghai, the largest consumer, have also fallen as the demand from China is declining and this has again affected the prices," Mishra added.
A Correction Period Has Come But Is Short Lived
THURSDAY, FEBRUARY 24, 2011 ADMIN
SHARE
TWEET
Tokyo rubber futures retreated consecutively during 21 - 22 February after hitting a fresh record high as market players took profits last Friday, and Shanghai rubber futures retreated ahead of the latest raise in the bank reserve requirement ratio of 0.5 percentage points by the People’s Bank of China.
Geopolitical tensions in the Middle-East and North Africa, especially in Libya, are now pushing up oil prices worldwide, and we will see tug-of-war between the greenback and commodity prices, crude oil futures in particular, for the time being.
Furthermore, it is too early to predict whether natural rubber (NR) production this year will be up or down, comparing with the previous year because we are only in the second month of the year. Even though there are additionally mature NR planted areas to be tapped this year, persistently erratic weather still slows normal production. Overexploitation of rubber trees is also another factor that should not be ruled out.
Due to the above mentioned reasons, market correction is likely to continue for a certain period of time, and steady NR demand from tire and non-tire manufacturers should be taken into account as J.D. Power and Associates said on 15 February that global auto sales would increase 6.0% in 2011 to a record 76.5 million new light vehicles.
0
NMCE Rubber continues downtrend on global cues
THURSDAY, FEBRUARY 24, 2011 ADMIN
SHARE
TWEET
NMCE rubber futures continued the bearish trend on active selling for 4th consecutive session on Wednesday. On opening itself prices traded down on heavy selling pressure. TOCOM rubber futures also traded down on active selling. However, settled on slightly positive note to ¥ 507.40 per Kg. on short covering at previous losses.
Thus, taking cues from positive closing of TOCOM futures NMCE rubber prices showed small recovery but failed to sustain the gains and fell drastically. Domestic spot market also reported a fall of `700 per quintal in a single day. Thus, on cues from domestic and international market NMCE rubber futures ended on negative note.
The rubbers futures are projected to extend the bearish trend today on negative cues from domestic market. However prices are likely to resume upside on short covering taking cues from TOCOM futures. TOCOM rubber July futures are trading slightly positive at ¥ 489.40 per Kg. on short covering on lower levels. Moreover, increasing Middle East concern might weigh on prices. Thus on cues from above stated factors NMCE rubber futures are projected to trade range bound to lower today.
Factors to Watch For
The stock of natural rubber in the country till January 30, 2011, is estimated at 3,27,115 tons, according to chairman of Rubber Board of India
According to the Rubber Research Institute of Thailand, the physical price of Thai rubber dropped 0.9 percent to 195.80 baht ($6.42) a kilogram yesterday
People’s Bank of China has increased the interest rate by 50 basis which is pressurizing the rubber prices as China is the largest consumer of natural rubber
Natural-rubber inventories monitored by the Shanghai Futures Exchange is reported around at 58,058 tons, which is down by 62 % from last year’s highest inventory levels of 151,832 tons
According to the Association of Natural Rubber Producing Countries, Natural-rubber consumption in China and India may rise 9 percent to 3.6 million tons this year and 5.2 percent to 991,000 tons respectively
According to Passenger Car Association, passenger-car sales increased 16.2 percent Y/Y to 1.53 million last month
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February contract, prices and open interest are falling while volumes are rising. It is a good indication that heavy short selling is happening in market. However, traders are exiting their positions towards the end of the day winning short positions and loosing long positions. Market might remain volatile to down in short term
Japan Futures (TOCOM)
The TOCOM active June contract, prices, volumes and open interest all are falling. If the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions. Technicians view this scenario as a strong position technically because the downtrend will end as all the sellers have sold their positions, creating fresh buying opportunity at lower levels.
Shanghai Futures (SHFE)
The SHFE active June contract, prices and volumes are falling while open interest is rising. It is a good indication that a sharp rally against downtrend will develop creating a sell point for downtrend.
THURSDAY, FEBRUARY 24, 2011 ADMIN
KOTTAYAM, FEB. 23:
Physical rubber prices fell further on Wednesday. Sharp declines on the National Multi Commodity Exchange kept traders under pressure during early trades but prices managed to sustain at the prevailing levels following a partial recovery in domestic futures. RSS 4 was hit badly as buyers stayed back letting the grade to fall freely on an almost panic selling from dealers and growers.
Sheet rubber nosedived to Rs 230 (237) a kg, according to traders. The grade declined sharply to Rs 231 (238) a kg both at Kottayam and Kochi, as quoted by the Rubber Board.
RSS 4 surrendered at its March series to Rs 229.20 (232.56), April to Rs 239.01 (241.89), May to Rs 245.50 (247.91), June to Rs 250.36 (253.36) and July to Rs 252 (254.66) a kg on the NMCE.
The March futures weakened to ¥514.4 (Rs 280.94) from ¥521.8 during the day session but then recovered to ¥521.6 (Rs 284.85) a kg in the night session on the Tokyo Commodity Exchange. RSS 3 (spot) slipped to Rs 289.31 (292.05) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 230 (237); RSS-5: 225 (230); ungraded: 220 (225); ISNR 20: 230 (238) and latex 60 per cent: 145 (146).
Natural rubber prices fall by Rs 7 in the domestic markets
THURSDAY, FEBRUARY 24, 2011
New Delhi, Feb 23 (PTI) Natural Rubber prices today fell by Rs seven to Rs 231 per kg in the domestic market due to fall in the prices in the International and domestic future markets.
The prices of natural rubber yesterday at the Kottayam market were ruling at Rs 238 per kg.
"Fall in prices of rubber in the international market, Tokyo Commodity exchange (TOCOM) and in the domestic market has affected the prices in the physical markets here," Indian Rubber Dealers Association President George Valy told PTI.
"Internationally there is lot of voltality in the prices of rubber," Valy added.
Prices of natural rubber in the Bangkok market closed at Rs 289.31 per kg as against Rs 292.05 per kg yesterday.
"The prices in the domestic future markets have been affected due to a fall in the prices in TOCOM," National Multi Commodity Exchange Chief Executive Office Anil Mishra told PTI.
"The prices of rubber at Shanghai, the largest consumer, have also fallen as the demand from China is declining and this has again affected the prices," Mishra added.
A Correction Period Has Come But Is Short Lived
THURSDAY, FEBRUARY 24, 2011 ADMIN
SHARE
TWEET
Tokyo rubber futures retreated consecutively during 21 - 22 February after hitting a fresh record high as market players took profits last Friday, and Shanghai rubber futures retreated ahead of the latest raise in the bank reserve requirement ratio of 0.5 percentage points by the People’s Bank of China.
Geopolitical tensions in the Middle-East and North Africa, especially in Libya, are now pushing up oil prices worldwide, and we will see tug-of-war between the greenback and commodity prices, crude oil futures in particular, for the time being.
Furthermore, it is too early to predict whether natural rubber (NR) production this year will be up or down, comparing with the previous year because we are only in the second month of the year. Even though there are additionally mature NR planted areas to be tapped this year, persistently erratic weather still slows normal production. Overexploitation of rubber trees is also another factor that should not be ruled out.
Due to the above mentioned reasons, market correction is likely to continue for a certain period of time, and steady NR demand from tire and non-tire manufacturers should be taken into account as J.D. Power and Associates said on 15 February that global auto sales would increase 6.0% in 2011 to a record 76.5 million new light vehicles.
0
NMCE Rubber continues downtrend on global cues
THURSDAY, FEBRUARY 24, 2011 ADMIN
SHARE
TWEET
NMCE rubber futures continued the bearish trend on active selling for 4th consecutive session on Wednesday. On opening itself prices traded down on heavy selling pressure. TOCOM rubber futures also traded down on active selling. However, settled on slightly positive note to ¥ 507.40 per Kg. on short covering at previous losses.
Thus, taking cues from positive closing of TOCOM futures NMCE rubber prices showed small recovery but failed to sustain the gains and fell drastically. Domestic spot market also reported a fall of `700 per quintal in a single day. Thus, on cues from domestic and international market NMCE rubber futures ended on negative note.
The rubbers futures are projected to extend the bearish trend today on negative cues from domestic market. However prices are likely to resume upside on short covering taking cues from TOCOM futures. TOCOM rubber July futures are trading slightly positive at ¥ 489.40 per Kg. on short covering on lower levels. Moreover, increasing Middle East concern might weigh on prices. Thus on cues from above stated factors NMCE rubber futures are projected to trade range bound to lower today.
Factors to Watch For
The stock of natural rubber in the country till January 30, 2011, is estimated at 3,27,115 tons, according to chairman of Rubber Board of India
According to the Rubber Research Institute of Thailand, the physical price of Thai rubber dropped 0.9 percent to 195.80 baht ($6.42) a kilogram yesterday
People’s Bank of China has increased the interest rate by 50 basis which is pressurizing the rubber prices as China is the largest consumer of natural rubber
Natural-rubber inventories monitored by the Shanghai Futures Exchange is reported around at 58,058 tons, which is down by 62 % from last year’s highest inventory levels of 151,832 tons
According to the Association of Natural Rubber Producing Countries, Natural-rubber consumption in China and India may rise 9 percent to 3.6 million tons this year and 5.2 percent to 991,000 tons respectively
According to Passenger Car Association, passenger-car sales increased 16.2 percent Y/Y to 1.53 million last month
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February contract, prices and open interest are falling while volumes are rising. It is a good indication that heavy short selling is happening in market. However, traders are exiting their positions towards the end of the day winning short positions and loosing long positions. Market might remain volatile to down in short term
Japan Futures (TOCOM)
The TOCOM active June contract, prices, volumes and open interest all are falling. If the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions. Technicians view this scenario as a strong position technically because the downtrend will end as all the sellers have sold their positions, creating fresh buying opportunity at lower levels.
Shanghai Futures (SHFE)
The SHFE active June contract, prices and volumes are falling while open interest is rising. It is a good indication that a sharp rally against downtrend will develop creating a sell point for downtrend.
Wednesday, February 16, 2011
What is driving record high rubber prices?
What is driving record high rubber prices?
TUESDAY, FEBRUARY 15, 2011
BANGKOK, Feb 15 - Rubber futures prices in Tokyo and Shanghai surged to a lifetime high this year and are likely to rise further on speculative buying and seasonal tight supply.
Benchmark rubber on the Tokyo Commodity Exchange <0#JRU:> for July delivery reached a new record high of 522.5 yen per kg on Tuesday. The most-active May rubber contract on Shanghai's exchange hit a record 43,500 yuan per tonne on Feb 9.
Strong futures are boosting physical prices, lifting the benchmark Thai RSS3 contract to a record $6.40 per kg on Monday.
Here are questions and answers on factors likely to influence rubber prices and the market.
WHAT IS HAPPENING WITH DEMAND AND SUPPLY?
Rubber prices began rising sharply in November when floods hit Thailand, the world's biggest rubber producer and exporter, disrupting tapping and destroying plantations.
After the floods receded, Thailand's southern region, which contributes 90 percent of the country's annual rubber production of around 3.2 million tonnes, was hit by unseasonal rains that disrupted tapping in December and January, cutting production.
Rains also affected plantations in Malaysia, the world's third-biggest producer, cutting supply, traders said.
This has coincided with a dry season in Indonesia, the world's second-biggest producer and exporter, further reducing supplies.
Output is likely to fall sharply from the end of February, when the dry season reduces latex output. Rubber trees have already started to shed leaves and are due to stop producing latex completely by March and April, when farmers will stop tapping and supply will probably drop as much as 80 percent.
Demand, however, is strong, especially from China, the world's biggest rubber consumer, due mostly to growth in its auto industries. China auto sales rose 33 percent in 2010, securing its position as the world's top market.
Despite record high offered prices, buying hasn't abated, encouraging producers to quote at even higher prices.
Benchmark Thai RSS3 was offered at the record high of $6.40 per kg.
IS SPECULATIVE BUYING PICKING UP?
Heavy speculative futures buying is also driving up physical prices, say industry officials and analysts, noting the U.S. Federal Reserve's $600 billion bond purchase programme has funneled cheap money into the rubber market, led by investors betting on further price rises who seek to take profits later.
"Funds have been pouring money into several commodities since late 2010, in particular rubber as they saw opportunities to capitalise on high prices at a time that supply is getting lower," said Yium Tavarolit, an economist at the International Rubber Consortium Ltd .
IS THERE HOARDING?
As supplies dwindle ahead of the dry season, local traders and producers have become reluctant to sell. Many want to keep rubber sheet in stock and wait to sell when prices move higher.
"They know that prices will rise eventually in March and April when supplies are due to fall sharply as rubber trees will stop producing latex," said a trader in Hat Yai, a southern Thai city and major rubber centre near the Malaysian border.
NMCE Rubber recovers on fresh buying
TUESDAY, FEBRUARY 15, 2011
NMCE rubber futures traded higher on extending fresh buying after witnessing huge losses last week. Futures started the day on positive note on active buying spot market activity also supported the upside.
TOCOM futures also traded higher and made a new high of ¥ 520 per Kg. and settled at ¥ 518.60 per Kg on bullish sentiments. Good recovery in spot prices also supported the prices at lower levels and futures traded on positive note.
The rubber futures are projected to trade positive on extending fresh buying on Tuesday. TOCOM rubber July futures are also trading up at ¥ 520.90 per Kg. after making a new high of ¥ 522.50 per Kg. on active buying interest. Emerging demand from tyre industry is also supporting the prices at domestic spot market. Thus on cues from above stated factors NMCE rubber futures are projected to trade higher today.
Factors to Watch For
Natural-rubber inventories monitored by the Shanghai Futures Exchange is reported around at 58,058 tons, which is down by 62 % from last year’s highest inventory levels of 151,832 tons
According to Rubber Research Institute of Thailand, The physical price of natural rubber in Thailand, the world’s largest exporter, extended gains to an all-time high of 193.30 baht ($6.28) per kilogram on Feb. 11
According to the Association of Natural Rubber Producing Countries, Natural-rubber consumption in China and India may rise 9 percent to 3.6 million tons this year and 5.2 percent to 991,000 tons respectively
Chinese rubber imports have come down by 14% to 150,000 tons due to prevailing higher prices in international market
According to China Association of Automobile Manufacturers, Car-sales growth in China will be around 10 to 15 percent this year Total auto sales, which include cars, trucks and buses, jumped 32 percent last year to 18.06 million
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February contract, prices, volumes and open interest all are rising. Market is attracting larger numbers of traders willing to open positions from the long side and hold them. Traders are more confident that prices will continue to climb in favor of a working long. This scenario is good clues that uptrend are secure & that the trend may continue further for a period of time.
Japan Futures (TOCOM)
The TOCOM active June contract, prices, open interest are rising while volumes are falling. Market is attracting late buyers & early shorts; market is vulnerable to a sharp correction but likely that that correction will be bought creating a buy point for uptrend.
Shanghai Futures (SHFE)
The SHFE active June contract, prices and volumes are falling while open interest is rising. It is a good indication that a sharp rally against downtrend will develop creating a sell point for downtrend.
Rubber bounces to record high
TUESDAY, FEBRUARY 15, 2011
Rubber advanced to a record amid speculation that China may increase purchases to replenish stockpiles before the low-production period begins in major growing areas in Thailand. The Thai cash price also climbed to an all-time high.
The July-delivery contract climbed as much as 1.2 percent to 520 yen a kilogram ($6,247 a ton) before settling at 518.7 yen on the Tokyo Commodity Exchange. The most-active contract has advanced 25 percent this year, extending the 50 percent rally in 2010.
Natural-rubber inventories monitored by the Shanghai Futures Exchange declined 615 tons to 58,058 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the bourse said on Friday.
Tokyo rubber futures hit record high
TUESDAY, FEBRUARY 15, 2011
Tokyo (february 15, 2011) : benchmark tokyo rubber futures hit a record high on monday as concerns over tight supply continued to lend support, while a weaker yen also boosted sentiment. the key tokyo commodity exchange rubbercontract for july delivery rose as high as 520 yen, the highest ever for any benchmark, before settling at 518.7 yen per kg, up 4.8 yen, or 0.9 percent, from thursday's settlement of 513.9 yen.
japanese financial markets were closed on friday for a national holiday. traders said speculative buying due to concerns about tight supply is expected to drive up prices. the price of benchmark thai rss3 rose to a new record again on monday. the most active shanghai rubber futures for may delivery closed at 42,860 yuan ($6,503) per tonne, up 175 yuan from friday's close of 42,685 yuan. they marked a record high of 43,500 yuan last week. volume stood at 444,090 lots. great wall motor co ltd, china's largest sport-utility vehicle maker, said on monday it expected its profit for 2010 to rise more than 50 percent from the previous year.
Sheet rubber up on fresh buying, short-covering
KOTTAYAM, FEB. 14:
Physical rubber prices firmed up on Monday. According to observers, some tyre companies also bought in the market as it gained strength from global cues and a recovery in domestic futures. The prices may touch new highs in the days ahead, they said.
Sheet rubber improved to Rs 238 (Rs 236) a kg on fresh buying and short-covering. The grade increased to Rs 237.5 (Rs 236.5) a kg both at Kottayam and Kochi, according to the Rubber Board.
The shortage of skilled labour has seriously affected the medium-rubber holdings in the country, said Mr N. Radhakrishnan, Advisor to the Cochin Rubber Merchants Association. While small growers can take recourse to in-house tapping skills, large estates can depend on captive labour. It is the medium holdings that often face acute labour shortage. The growth in the number of rubber trees planted and number of trees to be tapped might not reflect an increase in production unless the problem of labour shortage is resolved, he continued.
In futures, the February series moved up to Rs 237 a kg (Rs 235.21), March to Rs 243.98 a kg (Rs 239.85), April to Rs 253.3 a kg (Rs 248.92) and May to Rs 257.5 (Rs 252.69) a kg for RSS-4 on the National Multi-Commodity Exchange.
RSS-3 flared up at its February futures to ¥527 (Rs 287.69) from ¥519 a kg during the day session, but then slipped to ¥526.6 (Rs 287.51) in the night session on Tokyo Commodity Exchange. The grade (spot) closed firm at Rs 288.73 (Rs 286.94) a kg at Bangkok.
The spot rubber rates were (Rs/kg): RSS-4 — 238 (236); RSS-5 — 228 (226.5); ungraded — 224 (221); ISNR-20 — 235 (232); and latex 60 per cent — 149 (149).
TUESDAY, FEBRUARY 15, 2011
BANGKOK, Feb 15 - Rubber futures prices in Tokyo and Shanghai surged to a lifetime high this year and are likely to rise further on speculative buying and seasonal tight supply.
Benchmark rubber on the Tokyo Commodity Exchange <0#JRU:> for July delivery reached a new record high of 522.5 yen per kg on Tuesday. The most-active May rubber contract on Shanghai's exchange hit a record 43,500 yuan per tonne on Feb 9.
Strong futures are boosting physical prices, lifting the benchmark Thai RSS3 contract to a record $6.40 per kg on Monday.
Here are questions and answers on factors likely to influence rubber prices and the market.
WHAT IS HAPPENING WITH DEMAND AND SUPPLY?
Rubber prices began rising sharply in November when floods hit Thailand, the world's biggest rubber producer and exporter, disrupting tapping and destroying plantations.
After the floods receded, Thailand's southern region, which contributes 90 percent of the country's annual rubber production of around 3.2 million tonnes, was hit by unseasonal rains that disrupted tapping in December and January, cutting production.
Rains also affected plantations in Malaysia, the world's third-biggest producer, cutting supply, traders said.
This has coincided with a dry season in Indonesia, the world's second-biggest producer and exporter, further reducing supplies.
Output is likely to fall sharply from the end of February, when the dry season reduces latex output. Rubber trees have already started to shed leaves and are due to stop producing latex completely by March and April, when farmers will stop tapping and supply will probably drop as much as 80 percent.
Demand, however, is strong, especially from China, the world's biggest rubber consumer, due mostly to growth in its auto industries. China auto sales rose 33 percent in 2010, securing its position as the world's top market.
Despite record high offered prices, buying hasn't abated, encouraging producers to quote at even higher prices.
Benchmark Thai RSS3 was offered at the record high of $6.40 per kg.
IS SPECULATIVE BUYING PICKING UP?
Heavy speculative futures buying is also driving up physical prices, say industry officials and analysts, noting the U.S. Federal Reserve's $600 billion bond purchase programme has funneled cheap money into the rubber market, led by investors betting on further price rises who seek to take profits later.
"Funds have been pouring money into several commodities since late 2010, in particular rubber as they saw opportunities to capitalise on high prices at a time that supply is getting lower," said Yium Tavarolit, an economist at the International Rubber Consortium Ltd .
IS THERE HOARDING?
As supplies dwindle ahead of the dry season, local traders and producers have become reluctant to sell. Many want to keep rubber sheet in stock and wait to sell when prices move higher.
"They know that prices will rise eventually in March and April when supplies are due to fall sharply as rubber trees will stop producing latex," said a trader in Hat Yai, a southern Thai city and major rubber centre near the Malaysian border.
NMCE Rubber recovers on fresh buying
TUESDAY, FEBRUARY 15, 2011
NMCE rubber futures traded higher on extending fresh buying after witnessing huge losses last week. Futures started the day on positive note on active buying spot market activity also supported the upside.
TOCOM futures also traded higher and made a new high of ¥ 520 per Kg. and settled at ¥ 518.60 per Kg on bullish sentiments. Good recovery in spot prices also supported the prices at lower levels and futures traded on positive note.
The rubber futures are projected to trade positive on extending fresh buying on Tuesday. TOCOM rubber July futures are also trading up at ¥ 520.90 per Kg. after making a new high of ¥ 522.50 per Kg. on active buying interest. Emerging demand from tyre industry is also supporting the prices at domestic spot market. Thus on cues from above stated factors NMCE rubber futures are projected to trade higher today.
Factors to Watch For
Natural-rubber inventories monitored by the Shanghai Futures Exchange is reported around at 58,058 tons, which is down by 62 % from last year’s highest inventory levels of 151,832 tons
According to Rubber Research Institute of Thailand, The physical price of natural rubber in Thailand, the world’s largest exporter, extended gains to an all-time high of 193.30 baht ($6.28) per kilogram on Feb. 11
According to the Association of Natural Rubber Producing Countries, Natural-rubber consumption in China and India may rise 9 percent to 3.6 million tons this year and 5.2 percent to 991,000 tons respectively
Chinese rubber imports have come down by 14% to 150,000 tons due to prevailing higher prices in international market
According to China Association of Automobile Manufacturers, Car-sales growth in China will be around 10 to 15 percent this year Total auto sales, which include cars, trucks and buses, jumped 32 percent last year to 18.06 million
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February contract, prices, volumes and open interest all are rising. Market is attracting larger numbers of traders willing to open positions from the long side and hold them. Traders are more confident that prices will continue to climb in favor of a working long. This scenario is good clues that uptrend are secure & that the trend may continue further for a period of time.
Japan Futures (TOCOM)
The TOCOM active June contract, prices, open interest are rising while volumes are falling. Market is attracting late buyers & early shorts; market is vulnerable to a sharp correction but likely that that correction will be bought creating a buy point for uptrend.
Shanghai Futures (SHFE)
The SHFE active June contract, prices and volumes are falling while open interest is rising. It is a good indication that a sharp rally against downtrend will develop creating a sell point for downtrend.
Rubber bounces to record high
TUESDAY, FEBRUARY 15, 2011
Rubber advanced to a record amid speculation that China may increase purchases to replenish stockpiles before the low-production period begins in major growing areas in Thailand. The Thai cash price also climbed to an all-time high.
The July-delivery contract climbed as much as 1.2 percent to 520 yen a kilogram ($6,247 a ton) before settling at 518.7 yen on the Tokyo Commodity Exchange. The most-active contract has advanced 25 percent this year, extending the 50 percent rally in 2010.
Natural-rubber inventories monitored by the Shanghai Futures Exchange declined 615 tons to 58,058 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the bourse said on Friday.
Tokyo rubber futures hit record high
TUESDAY, FEBRUARY 15, 2011
Tokyo (february 15, 2011) : benchmark tokyo rubber futures hit a record high on monday as concerns over tight supply continued to lend support, while a weaker yen also boosted sentiment. the key tokyo commodity exchange rubbercontract for july delivery rose as high as 520 yen, the highest ever for any benchmark, before settling at 518.7 yen per kg, up 4.8 yen, or 0.9 percent, from thursday's settlement of 513.9 yen.
japanese financial markets were closed on friday for a national holiday. traders said speculative buying due to concerns about tight supply is expected to drive up prices. the price of benchmark thai rss3 rose to a new record again on monday. the most active shanghai rubber futures for may delivery closed at 42,860 yuan ($6,503) per tonne, up 175 yuan from friday's close of 42,685 yuan. they marked a record high of 43,500 yuan last week. volume stood at 444,090 lots. great wall motor co ltd, china's largest sport-utility vehicle maker, said on monday it expected its profit for 2010 to rise more than 50 percent from the previous year.
Sheet rubber up on fresh buying, short-covering
KOTTAYAM, FEB. 14:
Physical rubber prices firmed up on Monday. According to observers, some tyre companies also bought in the market as it gained strength from global cues and a recovery in domestic futures. The prices may touch new highs in the days ahead, they said.
Sheet rubber improved to Rs 238 (Rs 236) a kg on fresh buying and short-covering. The grade increased to Rs 237.5 (Rs 236.5) a kg both at Kottayam and Kochi, according to the Rubber Board.
The shortage of skilled labour has seriously affected the medium-rubber holdings in the country, said Mr N. Radhakrishnan, Advisor to the Cochin Rubber Merchants Association. While small growers can take recourse to in-house tapping skills, large estates can depend on captive labour. It is the medium holdings that often face acute labour shortage. The growth in the number of rubber trees planted and number of trees to be tapped might not reflect an increase in production unless the problem of labour shortage is resolved, he continued.
In futures, the February series moved up to Rs 237 a kg (Rs 235.21), March to Rs 243.98 a kg (Rs 239.85), April to Rs 253.3 a kg (Rs 248.92) and May to Rs 257.5 (Rs 252.69) a kg for RSS-4 on the National Multi-Commodity Exchange.
RSS-3 flared up at its February futures to ¥527 (Rs 287.69) from ¥519 a kg during the day session, but then slipped to ¥526.6 (Rs 287.51) in the night session on Tokyo Commodity Exchange. The grade (spot) closed firm at Rs 288.73 (Rs 286.94) a kg at Bangkok.
The spot rubber rates were (Rs/kg): RSS-4 — 238 (236); RSS-5 — 228 (226.5); ungraded — 224 (221); ISNR-20 — 235 (232); and latex 60 per cent — 149 (149).
Friday, February 11, 2011
Tokyo futures hit new high on firm oil, supply
Tokyo futures hit new high on firm oil, supply
Posted: 10 Feb 2011 01:24 AM PST
BANGKOK, Feb 10 - Tokyo rubber futures jumped to a new record on Thursday, on the back of speculative buying due to concerns of tight supply and firmer oil prices.
* The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for July delivery rose 9.9 yen to settle at 513.9 yen per kg. It rose as high as 515.0 yen per kg, its highest ever.
* U.S. crude oil futures inched higher on Thursday amid ongoing concerns about unrest in Egypt, while a weaker dollar helped Brent rise above $102 a barrel. [ID:nL3E7DA02K]
* Dealers said TOCOM prices were expected to rise further on Friday on the back of strong demand and thin supplies as dry weather cuts supply in producing countries.
* TOCOM rubber was expected to rise further to test new resistance of 520 yen per kg, with the 500 level being seen as a strong psychological support level, they said. (Reporting by Apornrath Phoonphongphiphat; Editing by Jason Szep)
(Source: http://asia.news.yahoo.com/rtrs/20110210/tap-markets-asia-rubber-c3bb44c.html)
Rubber at record high for second day
Posted: 09 Feb 2011 11:03 PM PST
RUBBER advanced to an all-time high for a second day amid speculation record prices will not deter tiremakers from purchasing the raw material used in tires as auto sales continue to climb.
The July-delivery contract jumped as much as 2.2 per cent to 515 yen a kilogram ($6,240 a metric ton) before trading at 514.5 yen on the Tokyo Commodity Exchange at 12:02 p.m.
Sumitomo Rubber Industries Ltd., Japan’s second-largest tire maker, raised its earnings estimate yesterday, citing strong sales of snow tires in the domestic market and expanding demand overseas. Bridgestone Corp., the world’s largest manufacturer, yesterday announced increases of 8 percent to 15 per cent in product prices for the Japanese market from June 1.
“Tire producers may have no other options but to increase rubber purchases, regardless of record prices, as they have to raise output to meet expanding demand,” Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co., said today.
Rubber futures have gained 24 per cent this year, extending last year’s 50 per cent rally, as rising car sales led by China and India boosted demand for tires. Shipments from Thailand, Indonesia and Malaysia, the top growers representing 70 percent of global supply, were curbed by heavy rains.
Nissan Motor Co., Japan’s second-largest automaker, raised its profit forecast yesterday after new models and increasing sales in North America and Asia helped the company offset the impact of the strong yen. The company expects to sell 4.165 million vehicles in the year ending March 31, up from an earlier forecast of 4.1 million.
Car-sales growth in China, the world’s biggest auto market, will be around 10 per cent to 15 per cent this year, according to the China Association of Automobile Manufacturers. Total auto sales, which include cars, trucks and buses, jumped 32 percent last year to 18.06 million, the group said.
Natural-rubber consumption in China may rise 9 percent to 3.6 million tons this year, while rubber use in India may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries.
In Shanghai, May-delivery rubber gained as much as 2.6 percent to 43,290 yuan ($6,573) a metric ton before trading at 43,100 yuan at 10:38 a.m. local time. The price climbed to a record 43,500 yuan yesterday.
The physical price of natural rubber in Thailand, the world’s largest exporter, extended gains to an all-time high of 187.80 baht ($6.12) per kilogram yesterday, boosted by strong demand from local and overseas buyers amid concerns over supply shortages, the Rubber Research Institute of Thailand said.
Output from Thailand, Indonesia and Malaysia has been cut as a La Nina weather event caused higher-than-average rains in parts of Southeast Asia.
Supply is expected to decline further in coming months as the seasonal low-production period will start in major growing areas in Thailand, Tasaka at ACE Koeki said. Farmers reduce tapping during the so-called wintering period from February to May, when trees shed leaves and latex production drops. - Bloomberg
Read more: Rubber at record high for second day http://www.btimes.com.my/articles/20110210115002/Article/#ixzz1DXMc9lyB
Natural rubber production rises marginally
Posted: 09 Feb 2011 05:40 PM PST
Natural rubber (NR) production increased 2.8 per cent between April 2010 and January 2011. According to provisional estimates by the Rubber Board, the consumption of rubber grew 1.8 per cent, a marginal increase compared to 1.6 per cent in the April-December period.
Interestingly, the consumption of natural rubber took a U-turn in January, with a 1.3 per cent increase as compared to the negative growth of 1.3 per cent in December. In January, the consumption increased to 81,000 tonnes as against 77,500 tonnes in December 2010.
Production in January increased to 98,800 tonnes as against 97,500 tonnes in the same month of last year, registering a growth of 1.3 per cent. Cumulative production in April–January period increased to 7,49,950 tonnes as against 7,29,250 tonnes in the same period of last financial year.
During the same period, consumption increased to 7,89,230 tonnes as against 775,565 tones in the same period of last financial year.
(Source: http://www.sify.com/finance/natural-rubber-production-rises-marginally-news-default-lckbbNggbbi.html)
Rubber Smuggling Concern in Cambodia
Posted: 09 Feb 2011 05:39 PM PST
Border smuggling has been blamed by the General Directorate of Rubber as the cause of a 15 percent drop in exports of the Cambodian crop last year. The Ministry of Commerce reported yesterday (February 8) that rubber exports fell last year to around 30,039 tonnes, down from 35,482 tonnes in 2009.
But Ly Phalla, director general of the General Directorate of Rubber, told The Post that the figure reported did not tally with his estimates. He believes that between 45,000 and 50,000 tonnes of the lucrative crop have been transported to international markets – based on the 39,000 hectares of rubber trees harvested in the Kingdom last year each producing about 1.2 tonnes per hectare.
“We think that falling rubber exports were due to cross-border smuggling, because there are some small border entrances at which there are no authorities stationed in order to record export figures,” he said.
The Directorate expects production to increase in 2011 as more trees mature, but warned that poor management and a higher tax rate could affect exports.
Ly Phalla highlighted the government’s new rubber export tax, ratified by Hun Sen in December.
The tax had previously sat at $50 per tonne, regardless as to the value of rubber, but the highest-value rubber is now taxed at $300 per tonne.
“In 2011 rubber exports could slow down, if the authorities do not strictly control the border entrances,” he said.
Kun Nhem, deputy director of the General Department of Customs and Excise, said yesterday (February 8) the customs unit was strengthening management over exported goods, especially rubber.
He said that in order to implement this policy more effectively, the general department of custom and excise would ensure rubber exports are only made through the Trapaing Phlong border in Kampong Cham province to ease tax collection.
“We don’t know whether rubber is smuggled because recently we are strictly implementing our measures,” he said. One rubber producer, while supporting efforts to control rubber exports, also said that some yields had been lower than expected.
Deputy director of Sopheak Nika Investment Group, Men Sopheak, said that some younger rubber trees produced between 600 to 700 kilograms of rubber per hectare.
“I think the government should take action to effectively control rubber exports. “Prevention of smuggling can help the rubber industry in the future,” he added.
The price of rubber on international markets has soared this year. Yesterday (February 8), the July-delivery contract gained as much as 2.1 percent to 501.3 yen a kilogram (US$6,090 a tonne) before trading at 499.3 yen on the Tokyo Commodity Exchange as of 11:57 a.m.
The physical price of natural rubber in Thailand extended gains to an all-time high of 185.80 baht (US$6.06) per kilogram on concern over supply shortages in Thailand and Malaysia.
(The Phnom Penh Post, Cambodia, February 9, 2011)
India Car Sales Hit Record in January
Posted: 09 Feb 2011 05:38 PM PST
Car sales in India rose 26% over a year earlier to a monthly record in January as rising personal income in a growing economy bolstered demand in Asia's third-biggest automobile market.
According to data issued Wednesday (February 9) by the Society of Indian Automobile Manufacturers, an industry lobby group, auto makers sold 184,332 passenger cars in January, compared with 145,971 units a year earlier. That beat the previous all-time high sales of 182,992 cars last October.
Sales rose despite price hikes by companies such as Maruti Suzuki India Ltd., Hyundai Motor Co. and Volkswagen AG in the past month to offset higher raw-material costs.
The Indian automobile market weathered the global economic downturn better than the rest of the world, as new models and easy bank loans encouraged people to spend more on new vehicles.
Companies such as Ford Motor Co., Volkswagen, General Motors Co. and Nissan Motor Co. have aggressively expanded in India to offset a slump in their traditional strongholds, the U.S. and Europe, while Indian companies such as Maruti expanded their portfolio and capacities to take on increasing competition.
Consultancy firm J.D. Power and Associates expects growth in the Indian market to continue.
"We believe that the Indian market is all set for another record year in 2011," helped by strong fundamentals such as an expanding economy, higher personal income levels and the development of the country's roads, Darius Lam, a senior market analyst at J.D. Power, said in a recent report.
He said the consultancy expects total passenger vehicle sales to rise to 3.16 million units in 2011, up 17% from 2010.
But, Sugato Sen, a senior director at the manufacturers' body, said rising interest rates, accelerating inflation and higher raw-material costs would likely moderate growth in the next financial year, starting April 1.
India's central bank has raised its short-term rates seven time in the past one year, and is expected to tighten its policy further as inflation remains high. Commercial lending rates, which remained largely unaffected until recently despite the policy steps, have now started rising, also driven by a cash shortage in the banking system.
Still, customers may buy more vehicles in February, fearing another price rise in March after the government's budget presentation, Mr. Sen said. "People are anticipating an excise tax hike [in the federal budget] and that will increase prices of some models significantly."
In January, sales of Maruti, the leader in India's car market, rose 20% to 84,318 cars. The local unit of Suzuki Motor Corp. raised prices by 1,000 rupees-10,000 rupees on some models as cost of rubber and steel rose.
Mahindra & Mahindra Ltd., India's top sport-utility-vehicle maker by sales, also raised its vehicle prices by up to 2.5%, while Tata Motors Ltd., the country's biggest vehicle
maker by total sales, increased prices of its commercial vehicles by 1,500 rupees-30,000 rupees and of passenger vehicles by 3,000 rupees-15,000 rupees in January.
Mr. Sen of the manufacturers' body said exports in the current financial year may fall short of target, owing primarily to a slowdown in Europe. "We were targeting passenger vehicle exports of more than 500,000 this year ... But, I don't think we will be able to meet that."
Passenger vehicle exports in April-January fell 3% to 358,583 units from 369,180 a year earlier.
India's commercial vehicle sales during January rose 13% to 60,753 units. Tata Motors sold 35,831 commercial vehicle, up 15%, while Ashok Leyland Ltd. posted an 8% fall in sales to 6,880 vehicles.
Two-wheeler makers like Hero Honda Motors Ltd., Bajaj Auto Ltd. and TVS Motor Ltd. sold 747,818 motorcycles in January, a rise of 15%. Scooter sales rose 30% to 180,072 units.
(The Wall Street Journal, February 9, 2011)
NR prices on an upward spiral
Posted: 09 Feb 2011 05:35 PM PST
Natural rubber prices hit all-time high.
That’s been a common headline throughout the past month, as NR prices have climbed well past the $5-per-kilogram mark—to $6.05 in Tokyo on Feb. 7. With NR supply short and demand high, they show every sign of going higher.
The cause—a perfect storm in the NR world, a combination of soaring demand, weather woes, currency fluctuations and the slow pace of replanting and maturation of the Hevea brasiliensis tree.
NR prices have rocketed upward on various commodity exchanges. On the Singapore Commodity Exchange, Rubber Smoked Sheets 3 reached $5.70 per kilo for March delivery in Singapore Jan. 20, while Technically Specified Rubber 20 rose to $5.47 per kilogram.
Standard Indonesian Rubber 20, the natural rubber grade used most often by U.S. tire manufacturers, stood at $2.51 per pound at the port of origin Jan. 20, a full 10 cents higher than just eight days before.
At the same time, prices of styrene-butadiene rubber, the most commonly used synthetic rubber, haven’t matched the NR increases. But like NR and butadiene, SBR prices have risen.
SBR prices increased some $600 per metric ton to $3,000-$3,100 between early October and January, according to ICIS, an online chemical and synthetic rubber information service.
The NR situation
There is no real end in sight for skyrocketing NR prices, according to various participants in the field.
“It’s not going to get any better,” said a source close to the NR industry who asked to remain anonymous. “It’s just an ugly world out there, and I see shortages developing.”
The Association of Natural Rubber Producing Countries, a Southeast Asian group whose members account for more than 90 percent of world NR production, projected in November that world NR supply would fall 3.8 percent in the fourth quarter of 2010.
Major supply increases from Indonesia did not make up for a massive production shortfall in Thailand caused by heavy rains and flooding in the fall of 2010, the ANRPC said in the latest edition of its newsletter, Natural Rubber Trends & Statistics.
The Rubber Research Institute of Thai- land estimated that about 45,000 acres of Hevea trees had been flooded and another 39,000 acres damaged by heavy winds, the ANRPC said.
This caused not only short-term supply issues because of harvest disruptions, but also long-term problems because of tree damage that could reduce Thailand’s NR production by 30,000 metric tons annually, the association said.
Meanwhile, NR imports into China were expected to increase 21 percent during that quarter.
High prices and low supply in the NR market seem likely to continue for some time, according to the Rubber Economist Ltd., a rubber economics website with offices in Bangkok and London.
“The fact that short-term factors such as currency movements and weather can cause such a sharp increase or decrease in rubber prices points to a serious tightness in the market,” a spokes-man for the Rubber Economist said in an e-mail.
“In the long term, there is a general belief that there will be a structural surplus for many commodities, but not for NR,” the spokesman said. Rapid growth in Asia is more than making up for saturation of demand in the West, it said, while increasing production costs will influence NR-producing countries to slow down their replanting and harvesting efforts.
The SBR situation
SBR pricing is determined essentially by two factors, according to experts: vehicle demand and butadiene prices. NR prices, because NR and SBR are both such important raw materials in tire and rubber product manufacturing, also play a role in determining SBR prices.
Butadiene prices have been in a rare situation in the last few months, according to Gene Lockard, a senior editor/ manager at ICIS.
Every month, the four major producers of butadiene make nominations for the price of butadiene, Lockard said. The lowest nomination is the price for that month.
However, recently one or more producers have been unwilling to settle on the lowest nominated price, creating price increases.
Butadiene prices are the main factor in contract prices for SBR 1502 and 1712, the most common grades, according to Lockard. Spot prices, on the other hand, are tied mostly to demand.
“With new car sales flatter than a pancake for 2009, and only the Cash for Clunkers program creating temporary relief, SBR producers wound down capacity,” he said. In 2009, SBR facilities ran at an average of 65- to 75-percent capacity, he said.
But original equipment and replacement tire demand is growing again, creating what Lockard called a “mild to moderate” demand for SBR.
The enormous increases in NR prices are motivating tire and rubber product makers to minimize their use of NR in favor of synthetic rubber, according to Lockard. But this is not unmitigated good news for SBR producers.
“SBR producers are between a rock and a hard place,” he said.
“It doesn’t pay to be too aggressive in raising prices, or you might chase away customers.”
What manufacturers are doing
Balancing rubber product formulations to mitigate raw material cost increases is a delicate issue—so delicate, in fact, that few rubber product manufacturers are willing to talk about it, except in the most general terms.
“How can we find cheaper raw materials and make the same products?” said a spokesman for one manufacturer. “Where is that not a possibility? One of the challenges in a situation like this is going up to the customer and saying, ‘We can’t stay in business if we keep selling at the same price.’ “
In announcing their earnings, some rubber product manufacturers are frank about the effect of high raw materials costs. Continental A.G., for example, announced that record-high raw materials costs in 2010 cost the company an additional $625 million for the year.
“We hope that prices for natural rubber will return to more reasonable levels once weather conditions have calmed down and the winter season in the major production countries has come to an end,” said a Continental spokeswoman in Hanover, Germany.
Conti’s reaction to higher raw materials costs has been to raise prices, though these increases have only partially offset the higher costs, the spokeswoman said. Those price increases—8.5 percent in NAFTA countries and 7 percent in Europe—have already been announced, she said.
“To compensate for the climbing raw material costs—especially natural rubber—we will probably have to initiate further substantial price increases. The success of such a measure will depend on how the prices for natural rubber develop in the future.”
Some companies have taken sweeping measures to minimize raw materials costs. A spokeswoman for Freudenberg-NOK L.P., for example, said her company switched to mostly SR five or six years ago, so NR price increases have had little effect on it. Higher SR prices also have not been a major factor for Freudenberg, she said.
(Source: http://www.rubbernews.com/latexnews/full-story.html?id=1297096829)
Rubber Climbs to Record on Prospects for Increased China Demand
Posted: 09 Feb 2011 05:34 PM PST
Rubber climbed to a record on expectations that demand from China for the commodity used in tires will keep expanding even after the nation raised interest rates for the third time in four months to restrain inflation.
The July-delivery contract gained to as much as 510 yen a kilogram ($6,178 a metric ton) in after-hours trade on the Tokyo Commodity Exchange. Transactions in this session are settled tomorrow. Futures in Shanghai surged 4.3 percent to a record 43,500 yuan a metric ton as trade restarted after a holiday.
The People’s Bank of China raised the one-year lending rate by a quarter point to 6.06 percent, effective today, and the one-year deposit rate by an equivalent amount to 3 percent. PremierWen Jiabao’s government has yet to return rates to pre- crisis levels, seeking to sustain the economy’s rebound.
“The moderate increases in Chinese rates are unlikely to derail the nation’s economy from expansion,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said by phone. There’s “speculation demand from China will continue to grow.”
China’s central bank announced the move yesterday, the last day of the weeklong Lunar New Year holiday, and before a report next week that may show consumer prices rose 5.3 percent in January, according to the median estimate in a Bloomberg survey.
“Demand in China remains strong and stockpiles are at low levels,” Pornthip Wongjirattikarn, marketing manager at Future Agri Trade Co., said by phone from Bangkok.
All-Time High
The physical price of natural rubber in Thailand, the world’s largest exporter, extended gains to an all-time high of 187.80 baht ($6.12) per kilogram, boosted by strong demand from local and overseas buyers amid concerns over supply shortages, the Rubber Research Institute of Thailandsaid today.
Natural-rubber consumption in China may rise 9 percent to 3.6 million tons this year, while rubber use in India may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries.
Output from Thailand, Indonesia and Malaysia, which account for about 70 percent of global supply, has been curbed as a La Nina has led to higher-than-average rains in parts of Southeast Asia. The weather event started in June.
Supply is expected to decline further in coming months as the seasonal low-production period will start in major growing areas in Thailand, Saito at Fujitomi said. Farmers reduce tapping during the so-called wintering period from February to May, when trees shed leaves and latex production drops.
Rubber futures have gained 23 percent this year, extending last year’s 50 percent rally, as rising car sales led by China and India boosted demand for tires.
(Source: http://www.bloomberg.com/news/2011-02-09/rubber-climbs-to-record-on-prospects-for-increased-china-demand.html)
Spot rubber turns weak
Posted: 09 Feb 2011 05:29 PM PST
KOTTAYAM, FEB. 9:
The physical rubber prices turned weak on Wednesday. The market slipped on buyer resistance reducing the gap between the domestic rubber futures on the NMCE. According to sources, there was selling from dealers but the volumes were dull. The trend was partially mixed as ISNR 20 remained flat and rather inactive.
Sheet rubber declined to Rs 235 (237) a kg according to dealers. The grade finished weak at Rs 235.50 (237) a kg both at Kottayam and Kochi as quoted by the Rubber Board.
As per reports, global demand for natural and synthetic rubber will enhance by about 40 per cent to 33.9 million tonnes in 2020 driven by consumption in India and China. The world consumption may be around 24.3 million tonnes in 2010, 15.3 per cent higher than 2009, and it is expected to gain another 6.3 per cent in 2011.
FUTURES RECOVER
RSS 4 recovered at its February series to Rs 234.75 (231.35), March to Rs 240.15 (236.93), April to Rs 249.15 (245.39) and May to Rs 252.47 (248.95) a kg on the National Multi Commodity Exchange (NMCE).
The volumes totalled 17322 lots and open interest 13665 lots. The turnover was Rs 415.39 crores.
RSS 3 (spot) firmed up further to Rs 278.08 (275.61) a kg at Bangkok. The February futures for RSS 3 improved to ¥507.5 (Rs 279.49) from ¥503 a kg during the day session and then to ¥512 (Rs 281.97) in the night session on then Tokyo Commodity Exchange (TOCOM).
Spot rates were (Rs/kg): RSS-4: 235 (237); RSS-5: 225 (227); ungraded: 220 (221); ISNR 20: 231 (231) and latex 60 per cent: 150 (152).
(Source: http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article1200534.ece)
Rubber output rises 1.3% in Jan
Posted: 09 Feb 2011 05:28 PM PST
KOCHI, FEB. 9:
Rubber production has grown marginally by 1.3 per cent in January to 98,800 tonnes as against 97,500 tonnes last year.
The absence of rains and conducive weather were reportedly the reasons behind the growth in production. However, the small growth in production has not been able to stem price rise.
Consumption also grew marginally in January to 81,000 tonnes. Rubber imports recorded a nominal growth during the month.
There is an acute shortage of skilled labour in the rubber holdings of the country, Mr N. Radhakrishnan, Advisor to the Cochin Rubber Merchants Association, said. This shortage is already afflicting the medium rubber holdings and could affect potential production. While small grower can take recourse to his in-house tapping skills, large estates can depend on their captive labour.
It is the medium holding of 20-200 acres that are often finding acute labour shortage. And this is expected to translate into lower production. The sheer growth in the number of rubber trees planted and the growth in number of trees tapped need not necessarily reflect into a spurt in production unless the labour shortage is addressed, Mr Radhakrishnan added.
Production for the April-January period was up 2.8 per cent at 7,49,950 tonnes (7,29,250 tonnes). The growth in consumption was just a notch lower at 1.8 per cent to 7,89,230 tonnes (7,75,565 tonnes). With the international prices often breaching the domestic prices, growth in rubber imports was also muted during the first 10 months of the current fiscal. Exports witnessed a deceleration during the period.
The Rubber Board figures paint a rosy picture about the stock of rubber available in the country at the end of January 2011. As against 2,91,530 tonnes of natural rubber available during last year, rubber stocks have grown to 3,27,115 tonnes at the end of January this year.
(Source: http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article1200418.ece)
Expectations Of Further Rises On Shanghai Rubber Futures Pushed Up NR Prices
Posted: 09 Feb 2011 05:19 PM PST
The benchmark prices for Feb. and Jul. deliveries on Tokyo rubber futures (Tocom) hit new record highs above a 500 yen/kg level on 4 Feb. while cash prices on physical markets followed suit except for Shanghai rubber futures, which still closed until 8 Feb. for the Lunar New Year holidays break.
The currently main factors which lend support for the rises on both markets are high crude oil futures, an upbeat U.S. economic data on a decline in an unemployment rate and an increase in nonfarm payrolls in January, flooding in Southern Malaysia, strengthening Asian currencies against the greenback, supply tightness and steady demand for rubber in the rubber market, particularly China and India.
Tokyo rubber hits new peak
Posted: 09 Feb 2011 05:15 PM PST
Bangkok (february 10, 2011) : tokyo rubber futures rose to a new record high on wednesday on speculative buying backed by tight supply in producing countries, but china's move to curb inflation prevented prices from rising sharply further. the benchmarkrubber contract on the tokyo commodity exchange rose 5.1 yen to settle at 504.4 yen per kg. it jumped as high as 508.3 yen, the highest ever.
in shanghai, which reopened on wednesday after a week-long holiday, the key contract for may delivery rose to a record high of 43,500 yuan ($6,639) per tonne immediately after the opening, above the previous high of 41,850 yuan hit on january 31. it settled at 42,215 yuan per tonne.
"rubber prices should rise much further, but the rises are capped by fears of falling demand after china raised interest rates to cool down its economy," one dealer said. with tight supply, the benchmark thai rss3 was offered at a new record high of $6.15 per kg on wednesday, while other asian rubber grades stayed at relatively high levels.
(Source: http://www.brecorder.com/news/agriculture-and-allied/world/1153652:tokyo-rubber-hits-new-peak.html?hl=rubber)
Posted: 10 Feb 2011 01:24 AM PST
BANGKOK, Feb 10 - Tokyo rubber futures jumped to a new record on Thursday, on the back of speculative buying due to concerns of tight supply and firmer oil prices.
* The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for July delivery rose 9.9 yen to settle at 513.9 yen per kg. It rose as high as 515.0 yen per kg, its highest ever.
* U.S. crude oil futures inched higher on Thursday amid ongoing concerns about unrest in Egypt, while a weaker dollar helped Brent rise above $102 a barrel. [ID:nL3E7DA02K]
* Dealers said TOCOM prices were expected to rise further on Friday on the back of strong demand and thin supplies as dry weather cuts supply in producing countries.
* TOCOM rubber was expected to rise further to test new resistance of 520 yen per kg, with the 500 level being seen as a strong psychological support level, they said. (Reporting by Apornrath Phoonphongphiphat; Editing by Jason Szep)
(Source: http://asia.news.yahoo.com/rtrs/20110210/tap-markets-asia-rubber-c3bb44c.html)
Rubber at record high for second day
Posted: 09 Feb 2011 11:03 PM PST
RUBBER advanced to an all-time high for a second day amid speculation record prices will not deter tiremakers from purchasing the raw material used in tires as auto sales continue to climb.
The July-delivery contract jumped as much as 2.2 per cent to 515 yen a kilogram ($6,240 a metric ton) before trading at 514.5 yen on the Tokyo Commodity Exchange at 12:02 p.m.
Sumitomo Rubber Industries Ltd., Japan’s second-largest tire maker, raised its earnings estimate yesterday, citing strong sales of snow tires in the domestic market and expanding demand overseas. Bridgestone Corp., the world’s largest manufacturer, yesterday announced increases of 8 percent to 15 per cent in product prices for the Japanese market from June 1.
“Tire producers may have no other options but to increase rubber purchases, regardless of record prices, as they have to raise output to meet expanding demand,” Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co., said today.
Rubber futures have gained 24 per cent this year, extending last year’s 50 per cent rally, as rising car sales led by China and India boosted demand for tires. Shipments from Thailand, Indonesia and Malaysia, the top growers representing 70 percent of global supply, were curbed by heavy rains.
Nissan Motor Co., Japan’s second-largest automaker, raised its profit forecast yesterday after new models and increasing sales in North America and Asia helped the company offset the impact of the strong yen. The company expects to sell 4.165 million vehicles in the year ending March 31, up from an earlier forecast of 4.1 million.
Car-sales growth in China, the world’s biggest auto market, will be around 10 per cent to 15 per cent this year, according to the China Association of Automobile Manufacturers. Total auto sales, which include cars, trucks and buses, jumped 32 percent last year to 18.06 million, the group said.
Natural-rubber consumption in China may rise 9 percent to 3.6 million tons this year, while rubber use in India may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries.
In Shanghai, May-delivery rubber gained as much as 2.6 percent to 43,290 yuan ($6,573) a metric ton before trading at 43,100 yuan at 10:38 a.m. local time. The price climbed to a record 43,500 yuan yesterday.
The physical price of natural rubber in Thailand, the world’s largest exporter, extended gains to an all-time high of 187.80 baht ($6.12) per kilogram yesterday, boosted by strong demand from local and overseas buyers amid concerns over supply shortages, the Rubber Research Institute of Thailand said.
Output from Thailand, Indonesia and Malaysia has been cut as a La Nina weather event caused higher-than-average rains in parts of Southeast Asia.
Supply is expected to decline further in coming months as the seasonal low-production period will start in major growing areas in Thailand, Tasaka at ACE Koeki said. Farmers reduce tapping during the so-called wintering period from February to May, when trees shed leaves and latex production drops. - Bloomberg
Read more: Rubber at record high for second day http://www.btimes.com.my/articles/20110210115002/Article/#ixzz1DXMc9lyB
Natural rubber production rises marginally
Posted: 09 Feb 2011 05:40 PM PST
Natural rubber (NR) production increased 2.8 per cent between April 2010 and January 2011. According to provisional estimates by the Rubber Board, the consumption of rubber grew 1.8 per cent, a marginal increase compared to 1.6 per cent in the April-December period.
Interestingly, the consumption of natural rubber took a U-turn in January, with a 1.3 per cent increase as compared to the negative growth of 1.3 per cent in December. In January, the consumption increased to 81,000 tonnes as against 77,500 tonnes in December 2010.
Production in January increased to 98,800 tonnes as against 97,500 tonnes in the same month of last year, registering a growth of 1.3 per cent. Cumulative production in April–January period increased to 7,49,950 tonnes as against 7,29,250 tonnes in the same period of last financial year.
During the same period, consumption increased to 7,89,230 tonnes as against 775,565 tones in the same period of last financial year.
(Source: http://www.sify.com/finance/natural-rubber-production-rises-marginally-news-default-lckbbNggbbi.html)
Rubber Smuggling Concern in Cambodia
Posted: 09 Feb 2011 05:39 PM PST
Border smuggling has been blamed by the General Directorate of Rubber as the cause of a 15 percent drop in exports of the Cambodian crop last year. The Ministry of Commerce reported yesterday (February 8) that rubber exports fell last year to around 30,039 tonnes, down from 35,482 tonnes in 2009.
But Ly Phalla, director general of the General Directorate of Rubber, told The Post that the figure reported did not tally with his estimates. He believes that between 45,000 and 50,000 tonnes of the lucrative crop have been transported to international markets – based on the 39,000 hectares of rubber trees harvested in the Kingdom last year each producing about 1.2 tonnes per hectare.
“We think that falling rubber exports were due to cross-border smuggling, because there are some small border entrances at which there are no authorities stationed in order to record export figures,” he said.
The Directorate expects production to increase in 2011 as more trees mature, but warned that poor management and a higher tax rate could affect exports.
Ly Phalla highlighted the government’s new rubber export tax, ratified by Hun Sen in December.
The tax had previously sat at $50 per tonne, regardless as to the value of rubber, but the highest-value rubber is now taxed at $300 per tonne.
“In 2011 rubber exports could slow down, if the authorities do not strictly control the border entrances,” he said.
Kun Nhem, deputy director of the General Department of Customs and Excise, said yesterday (February 8) the customs unit was strengthening management over exported goods, especially rubber.
He said that in order to implement this policy more effectively, the general department of custom and excise would ensure rubber exports are only made through the Trapaing Phlong border in Kampong Cham province to ease tax collection.
“We don’t know whether rubber is smuggled because recently we are strictly implementing our measures,” he said. One rubber producer, while supporting efforts to control rubber exports, also said that some yields had been lower than expected.
Deputy director of Sopheak Nika Investment Group, Men Sopheak, said that some younger rubber trees produced between 600 to 700 kilograms of rubber per hectare.
“I think the government should take action to effectively control rubber exports. “Prevention of smuggling can help the rubber industry in the future,” he added.
The price of rubber on international markets has soared this year. Yesterday (February 8), the July-delivery contract gained as much as 2.1 percent to 501.3 yen a kilogram (US$6,090 a tonne) before trading at 499.3 yen on the Tokyo Commodity Exchange as of 11:57 a.m.
The physical price of natural rubber in Thailand extended gains to an all-time high of 185.80 baht (US$6.06) per kilogram on concern over supply shortages in Thailand and Malaysia.
(The Phnom Penh Post, Cambodia, February 9, 2011)
India Car Sales Hit Record in January
Posted: 09 Feb 2011 05:38 PM PST
Car sales in India rose 26% over a year earlier to a monthly record in January as rising personal income in a growing economy bolstered demand in Asia's third-biggest automobile market.
According to data issued Wednesday (February 9) by the Society of Indian Automobile Manufacturers, an industry lobby group, auto makers sold 184,332 passenger cars in January, compared with 145,971 units a year earlier. That beat the previous all-time high sales of 182,992 cars last October.
Sales rose despite price hikes by companies such as Maruti Suzuki India Ltd., Hyundai Motor Co. and Volkswagen AG in the past month to offset higher raw-material costs.
The Indian automobile market weathered the global economic downturn better than the rest of the world, as new models and easy bank loans encouraged people to spend more on new vehicles.
Companies such as Ford Motor Co., Volkswagen, General Motors Co. and Nissan Motor Co. have aggressively expanded in India to offset a slump in their traditional strongholds, the U.S. and Europe, while Indian companies such as Maruti expanded their portfolio and capacities to take on increasing competition.
Consultancy firm J.D. Power and Associates expects growth in the Indian market to continue.
"We believe that the Indian market is all set for another record year in 2011," helped by strong fundamentals such as an expanding economy, higher personal income levels and the development of the country's roads, Darius Lam, a senior market analyst at J.D. Power, said in a recent report.
He said the consultancy expects total passenger vehicle sales to rise to 3.16 million units in 2011, up 17% from 2010.
But, Sugato Sen, a senior director at the manufacturers' body, said rising interest rates, accelerating inflation and higher raw-material costs would likely moderate growth in the next financial year, starting April 1.
India's central bank has raised its short-term rates seven time in the past one year, and is expected to tighten its policy further as inflation remains high. Commercial lending rates, which remained largely unaffected until recently despite the policy steps, have now started rising, also driven by a cash shortage in the banking system.
Still, customers may buy more vehicles in February, fearing another price rise in March after the government's budget presentation, Mr. Sen said. "People are anticipating an excise tax hike [in the federal budget] and that will increase prices of some models significantly."
In January, sales of Maruti, the leader in India's car market, rose 20% to 84,318 cars. The local unit of Suzuki Motor Corp. raised prices by 1,000 rupees-10,000 rupees on some models as cost of rubber and steel rose.
Mahindra & Mahindra Ltd., India's top sport-utility-vehicle maker by sales, also raised its vehicle prices by up to 2.5%, while Tata Motors Ltd., the country's biggest vehicle
maker by total sales, increased prices of its commercial vehicles by 1,500 rupees-30,000 rupees and of passenger vehicles by 3,000 rupees-15,000 rupees in January.
Mr. Sen of the manufacturers' body said exports in the current financial year may fall short of target, owing primarily to a slowdown in Europe. "We were targeting passenger vehicle exports of more than 500,000 this year ... But, I don't think we will be able to meet that."
Passenger vehicle exports in April-January fell 3% to 358,583 units from 369,180 a year earlier.
India's commercial vehicle sales during January rose 13% to 60,753 units. Tata Motors sold 35,831 commercial vehicle, up 15%, while Ashok Leyland Ltd. posted an 8% fall in sales to 6,880 vehicles.
Two-wheeler makers like Hero Honda Motors Ltd., Bajaj Auto Ltd. and TVS Motor Ltd. sold 747,818 motorcycles in January, a rise of 15%. Scooter sales rose 30% to 180,072 units.
(The Wall Street Journal, February 9, 2011)
NR prices on an upward spiral
Posted: 09 Feb 2011 05:35 PM PST
Natural rubber prices hit all-time high.
That’s been a common headline throughout the past month, as NR prices have climbed well past the $5-per-kilogram mark—to $6.05 in Tokyo on Feb. 7. With NR supply short and demand high, they show every sign of going higher.
The cause—a perfect storm in the NR world, a combination of soaring demand, weather woes, currency fluctuations and the slow pace of replanting and maturation of the Hevea brasiliensis tree.
NR prices have rocketed upward on various commodity exchanges. On the Singapore Commodity Exchange, Rubber Smoked Sheets 3 reached $5.70 per kilo for March delivery in Singapore Jan. 20, while Technically Specified Rubber 20 rose to $5.47 per kilogram.
Standard Indonesian Rubber 20, the natural rubber grade used most often by U.S. tire manufacturers, stood at $2.51 per pound at the port of origin Jan. 20, a full 10 cents higher than just eight days before.
At the same time, prices of styrene-butadiene rubber, the most commonly used synthetic rubber, haven’t matched the NR increases. But like NR and butadiene, SBR prices have risen.
SBR prices increased some $600 per metric ton to $3,000-$3,100 between early October and January, according to ICIS, an online chemical and synthetic rubber information service.
The NR situation
There is no real end in sight for skyrocketing NR prices, according to various participants in the field.
“It’s not going to get any better,” said a source close to the NR industry who asked to remain anonymous. “It’s just an ugly world out there, and I see shortages developing.”
The Association of Natural Rubber Producing Countries, a Southeast Asian group whose members account for more than 90 percent of world NR production, projected in November that world NR supply would fall 3.8 percent in the fourth quarter of 2010.
Major supply increases from Indonesia did not make up for a massive production shortfall in Thailand caused by heavy rains and flooding in the fall of 2010, the ANRPC said in the latest edition of its newsletter, Natural Rubber Trends & Statistics.
The Rubber Research Institute of Thai- land estimated that about 45,000 acres of Hevea trees had been flooded and another 39,000 acres damaged by heavy winds, the ANRPC said.
This caused not only short-term supply issues because of harvest disruptions, but also long-term problems because of tree damage that could reduce Thailand’s NR production by 30,000 metric tons annually, the association said.
Meanwhile, NR imports into China were expected to increase 21 percent during that quarter.
High prices and low supply in the NR market seem likely to continue for some time, according to the Rubber Economist Ltd., a rubber economics website with offices in Bangkok and London.
“The fact that short-term factors such as currency movements and weather can cause such a sharp increase or decrease in rubber prices points to a serious tightness in the market,” a spokes-man for the Rubber Economist said in an e-mail.
“In the long term, there is a general belief that there will be a structural surplus for many commodities, but not for NR,” the spokesman said. Rapid growth in Asia is more than making up for saturation of demand in the West, it said, while increasing production costs will influence NR-producing countries to slow down their replanting and harvesting efforts.
The SBR situation
SBR pricing is determined essentially by two factors, according to experts: vehicle demand and butadiene prices. NR prices, because NR and SBR are both such important raw materials in tire and rubber product manufacturing, also play a role in determining SBR prices.
Butadiene prices have been in a rare situation in the last few months, according to Gene Lockard, a senior editor/ manager at ICIS.
Every month, the four major producers of butadiene make nominations for the price of butadiene, Lockard said. The lowest nomination is the price for that month.
However, recently one or more producers have been unwilling to settle on the lowest nominated price, creating price increases.
Butadiene prices are the main factor in contract prices for SBR 1502 and 1712, the most common grades, according to Lockard. Spot prices, on the other hand, are tied mostly to demand.
“With new car sales flatter than a pancake for 2009, and only the Cash for Clunkers program creating temporary relief, SBR producers wound down capacity,” he said. In 2009, SBR facilities ran at an average of 65- to 75-percent capacity, he said.
But original equipment and replacement tire demand is growing again, creating what Lockard called a “mild to moderate” demand for SBR.
The enormous increases in NR prices are motivating tire and rubber product makers to minimize their use of NR in favor of synthetic rubber, according to Lockard. But this is not unmitigated good news for SBR producers.
“SBR producers are between a rock and a hard place,” he said.
“It doesn’t pay to be too aggressive in raising prices, or you might chase away customers.”
What manufacturers are doing
Balancing rubber product formulations to mitigate raw material cost increases is a delicate issue—so delicate, in fact, that few rubber product manufacturers are willing to talk about it, except in the most general terms.
“How can we find cheaper raw materials and make the same products?” said a spokesman for one manufacturer. “Where is that not a possibility? One of the challenges in a situation like this is going up to the customer and saying, ‘We can’t stay in business if we keep selling at the same price.’ “
In announcing their earnings, some rubber product manufacturers are frank about the effect of high raw materials costs. Continental A.G., for example, announced that record-high raw materials costs in 2010 cost the company an additional $625 million for the year.
“We hope that prices for natural rubber will return to more reasonable levels once weather conditions have calmed down and the winter season in the major production countries has come to an end,” said a Continental spokeswoman in Hanover, Germany.
Conti’s reaction to higher raw materials costs has been to raise prices, though these increases have only partially offset the higher costs, the spokeswoman said. Those price increases—8.5 percent in NAFTA countries and 7 percent in Europe—have already been announced, she said.
“To compensate for the climbing raw material costs—especially natural rubber—we will probably have to initiate further substantial price increases. The success of such a measure will depend on how the prices for natural rubber develop in the future.”
Some companies have taken sweeping measures to minimize raw materials costs. A spokeswoman for Freudenberg-NOK L.P., for example, said her company switched to mostly SR five or six years ago, so NR price increases have had little effect on it. Higher SR prices also have not been a major factor for Freudenberg, she said.
(Source: http://www.rubbernews.com/latexnews/full-story.html?id=1297096829)
Rubber Climbs to Record on Prospects for Increased China Demand
Posted: 09 Feb 2011 05:34 PM PST
Rubber climbed to a record on expectations that demand from China for the commodity used in tires will keep expanding even after the nation raised interest rates for the third time in four months to restrain inflation.
The July-delivery contract gained to as much as 510 yen a kilogram ($6,178 a metric ton) in after-hours trade on the Tokyo Commodity Exchange. Transactions in this session are settled tomorrow. Futures in Shanghai surged 4.3 percent to a record 43,500 yuan a metric ton as trade restarted after a holiday.
The People’s Bank of China raised the one-year lending rate by a quarter point to 6.06 percent, effective today, and the one-year deposit rate by an equivalent amount to 3 percent. PremierWen Jiabao’s government has yet to return rates to pre- crisis levels, seeking to sustain the economy’s rebound.
“The moderate increases in Chinese rates are unlikely to derail the nation’s economy from expansion,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said by phone. There’s “speculation demand from China will continue to grow.”
China’s central bank announced the move yesterday, the last day of the weeklong Lunar New Year holiday, and before a report next week that may show consumer prices rose 5.3 percent in January, according to the median estimate in a Bloomberg survey.
“Demand in China remains strong and stockpiles are at low levels,” Pornthip Wongjirattikarn, marketing manager at Future Agri Trade Co., said by phone from Bangkok.
All-Time High
The physical price of natural rubber in Thailand, the world’s largest exporter, extended gains to an all-time high of 187.80 baht ($6.12) per kilogram, boosted by strong demand from local and overseas buyers amid concerns over supply shortages, the Rubber Research Institute of Thailandsaid today.
Natural-rubber consumption in China may rise 9 percent to 3.6 million tons this year, while rubber use in India may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries.
Output from Thailand, Indonesia and Malaysia, which account for about 70 percent of global supply, has been curbed as a La Nina has led to higher-than-average rains in parts of Southeast Asia. The weather event started in June.
Supply is expected to decline further in coming months as the seasonal low-production period will start in major growing areas in Thailand, Saito at Fujitomi said. Farmers reduce tapping during the so-called wintering period from February to May, when trees shed leaves and latex production drops.
Rubber futures have gained 23 percent this year, extending last year’s 50 percent rally, as rising car sales led by China and India boosted demand for tires.
(Source: http://www.bloomberg.com/news/2011-02-09/rubber-climbs-to-record-on-prospects-for-increased-china-demand.html)
Spot rubber turns weak
Posted: 09 Feb 2011 05:29 PM PST
KOTTAYAM, FEB. 9:
The physical rubber prices turned weak on Wednesday. The market slipped on buyer resistance reducing the gap between the domestic rubber futures on the NMCE. According to sources, there was selling from dealers but the volumes were dull. The trend was partially mixed as ISNR 20 remained flat and rather inactive.
Sheet rubber declined to Rs 235 (237) a kg according to dealers. The grade finished weak at Rs 235.50 (237) a kg both at Kottayam and Kochi as quoted by the Rubber Board.
As per reports, global demand for natural and synthetic rubber will enhance by about 40 per cent to 33.9 million tonnes in 2020 driven by consumption in India and China. The world consumption may be around 24.3 million tonnes in 2010, 15.3 per cent higher than 2009, and it is expected to gain another 6.3 per cent in 2011.
FUTURES RECOVER
RSS 4 recovered at its February series to Rs 234.75 (231.35), March to Rs 240.15 (236.93), April to Rs 249.15 (245.39) and May to Rs 252.47 (248.95) a kg on the National Multi Commodity Exchange (NMCE).
The volumes totalled 17322 lots and open interest 13665 lots. The turnover was Rs 415.39 crores.
RSS 3 (spot) firmed up further to Rs 278.08 (275.61) a kg at Bangkok. The February futures for RSS 3 improved to ¥507.5 (Rs 279.49) from ¥503 a kg during the day session and then to ¥512 (Rs 281.97) in the night session on then Tokyo Commodity Exchange (TOCOM).
Spot rates were (Rs/kg): RSS-4: 235 (237); RSS-5: 225 (227); ungraded: 220 (221); ISNR 20: 231 (231) and latex 60 per cent: 150 (152).
(Source: http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article1200534.ece)
Rubber output rises 1.3% in Jan
Posted: 09 Feb 2011 05:28 PM PST
KOCHI, FEB. 9:
Rubber production has grown marginally by 1.3 per cent in January to 98,800 tonnes as against 97,500 tonnes last year.
The absence of rains and conducive weather were reportedly the reasons behind the growth in production. However, the small growth in production has not been able to stem price rise.
Consumption also grew marginally in January to 81,000 tonnes. Rubber imports recorded a nominal growth during the month.
There is an acute shortage of skilled labour in the rubber holdings of the country, Mr N. Radhakrishnan, Advisor to the Cochin Rubber Merchants Association, said. This shortage is already afflicting the medium rubber holdings and could affect potential production. While small grower can take recourse to his in-house tapping skills, large estates can depend on their captive labour.
It is the medium holding of 20-200 acres that are often finding acute labour shortage. And this is expected to translate into lower production. The sheer growth in the number of rubber trees planted and the growth in number of trees tapped need not necessarily reflect into a spurt in production unless the labour shortage is addressed, Mr Radhakrishnan added.
Production for the April-January period was up 2.8 per cent at 7,49,950 tonnes (7,29,250 tonnes). The growth in consumption was just a notch lower at 1.8 per cent to 7,89,230 tonnes (7,75,565 tonnes). With the international prices often breaching the domestic prices, growth in rubber imports was also muted during the first 10 months of the current fiscal. Exports witnessed a deceleration during the period.
The Rubber Board figures paint a rosy picture about the stock of rubber available in the country at the end of January 2011. As against 2,91,530 tonnes of natural rubber available during last year, rubber stocks have grown to 3,27,115 tonnes at the end of January this year.
(Source: http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article1200418.ece)
Expectations Of Further Rises On Shanghai Rubber Futures Pushed Up NR Prices
Posted: 09 Feb 2011 05:19 PM PST
The benchmark prices for Feb. and Jul. deliveries on Tokyo rubber futures (Tocom) hit new record highs above a 500 yen/kg level on 4 Feb. while cash prices on physical markets followed suit except for Shanghai rubber futures, which still closed until 8 Feb. for the Lunar New Year holidays break.
The currently main factors which lend support for the rises on both markets are high crude oil futures, an upbeat U.S. economic data on a decline in an unemployment rate and an increase in nonfarm payrolls in January, flooding in Southern Malaysia, strengthening Asian currencies against the greenback, supply tightness and steady demand for rubber in the rubber market, particularly China and India.
Tokyo rubber hits new peak
Posted: 09 Feb 2011 05:15 PM PST
Bangkok (february 10, 2011) : tokyo rubber futures rose to a new record high on wednesday on speculative buying backed by tight supply in producing countries, but china's move to curb inflation prevented prices from rising sharply further. the benchmarkrubber contract on the tokyo commodity exchange rose 5.1 yen to settle at 504.4 yen per kg. it jumped as high as 508.3 yen, the highest ever.
in shanghai, which reopened on wednesday after a week-long holiday, the key contract for may delivery rose to a record high of 43,500 yuan ($6,639) per tonne immediately after the opening, above the previous high of 41,850 yuan hit on january 31. it settled at 42,215 yuan per tonne.
"rubber prices should rise much further, but the rises are capped by fears of falling demand after china raised interest rates to cool down its economy," one dealer said. with tight supply, the benchmark thai rss3 was offered at a new record high of $6.15 per kg on wednesday, while other asian rubber grades stayed at relatively high levels.
(Source: http://www.brecorder.com/news/agriculture-and-allied/world/1153652:tokyo-rubber-hits-new-peak.html?hl=rubber)
Thursday, February 10, 2011
Rubber climbs to record
Rubber climbs to record
Posted: 08 Feb 2011 11:10 PM PST
RUBBER climbed to a record as the Shanghai market surged after the Lunar New Year break, raising speculation demand for the commodity used in tires from the world’s largest consumer will keep expanding.
The July-delivery contract gained as much as 1.7 per cent to 507.5 yen a kilogram ($6,162 a metric ton) before trading at 503.2 yen on the Tokyo Commodity Exchange at 11:15 a.m. Futures in Shanghai surged 4.3 per cent to an all-time high.
China increased interest rates for the third time in four months yesterday to curb inflation. The People’s Bank of China raised the one-year lending rate by a quarter point to 6.06 per cent and the one-year deposit rate an equivalent amount to 3 per cent.
Premier Wen Jiabao’s government has yet to return rates to pre-crisis levels, seeking to sustain the economy’s rebound to growth of about 10 per cent.
“The moderate increases in Chinese rates are unlikely to derail the nation’s economy from expansion,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said today by phone. “Rubber extended gains amid speculation demand from China will continue to grow.”
The Chinese central bank moved on the last day of the week-long holiday and before a report next week that may show consumer prices rose 5.3 per cent in January, according to the median estimate in a Bloomberg News survey of economists.
Government figures expected next week are also forecast to show China’s export growth accelerated in January and producer prices advanced at a faster pace, according to Bloomberg surveys.
Rubber futures have gained 22 per cent this year, extending last year’s 50 per cent rally, as rising car sales led by China and India boosted demand for tires.
Output from Thailand, Indonesia and Malaysia, which account for about 70 per cent of global rubber supply, were curbed as a La Nina has led to higher-than-average rains in parts of Southeast Asia. The weather event started in June and usually lasts for nine months or more.
Supply is expected to decline in coming months as the low- production period will start in major growing areas in Thailand, Saito at Fujitomi said. Farmers reduce tapping during the so- called wintering period from February to May, when trees shed leaves and latex production drops. Thai rubber output declines as much as 60 per cent during wintering compared with peak levels, according to the Association of Natural Rubber Producing Countries.
The physical price of natural rubber in Thailand, the world’s largest exporter, extended gains to an all-time high of 187.80 baht ($6.12) per kilogram, boosted by strong demand from local and overseas buyers amid concerns over supply shortages, Rubber Research Institute of Thailand said today.
In Shanghai, May-delivery rubber climbed to a record 43,500 yuan ($6,608) a ton before trading at 42,540 yuan at the 11:30 - a.m. local time break.
Natural-rubber consumption in China may rise 9 per cent to 3.6 million tons this year, while rubber use in India may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries. – Bloomberg
(Source: http://www.btimes.com.my/Current_News/BTIMES/articles/20110209124136/Article/index_html)
Rubber futures rebound on speculation China may replenish stockpiles
Posted: 08 Feb 2011 10:35 PM PST
Tuesday on speculation that Chinese companies will replenish depleted stockpiles, Bloomberg reported. Inventories monitored by the Shanghai Futures Exchange are down 61% year-on-year. Additional market support is provided by a seasonal phenomenon called the wintering period, during which time farmers reduce rubber tapping.
Thai rubber output declines as much as 60% during this period compared to peak levels. Rubber futures are already up 20% so far this year after increasing 50% in 2010, driven by rising car sales in China and India. At the same time, higher-than-average rainfall in Thailand, Indonesia and Malaysia has curbed production. The Thai cash price for rubber hit an all-time high of US$6.06 per kilogram on Tuesday on concern that the wintering period may result in shortages.
(Source: http://www.chinaeconomicreview.com/dailybriefing/2011_02_09/Rubber_futures_rebound_on_speculation_China_may_replenish_stockpiles.html)
Tokyo futures rise further, but weaker oil weighs
Posted: 08 Feb 2011 10:21 PM PST
BANGKOK, Feb 8 - Tokyo rubber futures rose further on Tuesday on the back of concerns on falling supply, but weaker oil prices still weighed on prices, dealers said.
* The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for July delivery rose 8.1 yen, or 1.6 percent, to settle at 498.9 yen per kg.
* Oil prices edged down on Tuesday as transit through the Suez Canal remained unaffected by the political turmoil in Egypt, while expectations of a build-up in U.S. crude inventories also weighed.
* "Players liquidated contracts again after seeing oil prices retreat, preventing rubber futures from breaking another new record," one dealer said.
* The Shanghai rubber futures market is closed and will reopen on Wednesday after a week-long holiday.
* TOCOM rubber futures prices were expected to rise further on Wednesday, as fears on falling supply was likely to provide supports, dealers said. (Reporting by Apornrath Phoonphongphiphat; Editing by Jason Szep)
(Source: http://asia.news.yahoo.com/rtrs/20110203/tap-markets-asia-rubber-c3bb44c.html)
Shanghai Rubber Hits Record High Above 41,850 Yuan
Posted: 08 Feb 2011 06:46 PM PST
Benchmark Shanghai rubber futures rose to a record high on Wednesday (February 9) on supply concerns and a surge in the TOCOM futures price, which also hit a record high earlier in the day.
The most active Shanghai rubber futures contract for May delivery rose as high as 43,500 yuan per tonne, climbing above the previous high of 41,850 yuan hit on Jan. 31.
The strong rises come after China moved for the second time in six weeks to rein in its surging inflation with an interest rate rise.
(Reuters, February 9, 2011)
Kumho Schedules Price Increases For March 1
Posted: 08 Feb 2011 06:45 PM PST
Kumho Tire U.S.A. Inc. will raise prices on all passenger, light truck and medium truck tires effective March 1. Kumho says the details of this increase will be provided to its customers in the near future.
"The unprecedented increase in raw material costs over the past few months have made it absolutely essential for Kumho to implement this increase," says the company.
Kumho last raised its consumer and truck tire prices -- up to 6.5% -- on Nov. 1, 2010.
Kumho is the latest tire manufacturer to announce an upcoming price increase.
Consumer
Goodyear Tire & Rubber Co. will raise consumer tire prices on March 1. The increase, up to 6%, will apply to all brands in the United States and Canada.
Falken Tire Corp. also will raise prices on March 1. The price hikes on Falken passenger and light truck tires will range from 5% to 8% depending on the size, with in-line adjustments as needed.
Bridgestone Americas Tire Operations LLC will raise replacement and original equipment consumer tire prices one month later, on April 1, The increases on Bridgestone, Firestone and associate brand passenger and light truck tires in the U.S. and Canada will vary up to 8%.
Cooper Tire & Rubber Co. (2.5%) and Michelin North America Inc. ("the increases will vary by product line") raised consumer tire prices on Feb. 1. Nexen Tire America Inc. (up to 8%) did the same on Jan. 1.
Commercial
The Bridgestone Off Road Tire, U.S. & Canada Commercial Tire Sales division will increase prices on its mining, construction and industrial tires by 12%, "with some in-line adjustments." The increases are scheduled to begin March 1.
The Bridgestone Agricultural Tire, U.S. & Canada Commercial Tire Sales division announced a 4% price increase effective April 1 on the following tires: Firestone agricultural, construction and forestry tires; Bridgestone garden tires; and Regency tires sold in the United States and Canadian replacement markets.
Michelin will increase prices on Michelin brand replacement agricultural tires sold in the U.S. and Canada on March 1. The hikes will be up to 8%.
The company already increased prices on its Michelin earthmover and industrial replacement tires sold in North America up to 7% on Feb. 1. It increased prices on Oliver and MegaMile retread rubber products sold in the U.S. up to 7% on Jan. 3.
CGS Tyres Group (7.5% to 10% on farm and industrial tires), Titan Tire Corp. (up to 8% on farm and OTR tires), Yokohama Tire Corp. (up to 5% on bias and radial OTR tires) and Continental Tire the Americas LLC (up to 8% on truck tires) raised their commercial tire prices on Jan. 1.
(Modern Tire Dealer, February 5, 2011)
NMCE Rubber drops on short selling
Posted: 08 Feb 2011 03:04 PM PST
NMCE rubber futures traded down on strong selling interest on Monday. Futures started the day on lower note on extended selling pressure. TOCOM rubber also traded down and ended lower at ¥499.30 per Kg. Indian spot market also fell by Rs. 100 per quintal. Thus, on cues from international and domestic market rubber futures ended the day on lower note.
The rubber futures are projected to trade range bound on mixed sentiments prevailing in market on Tuesday. TOCOM rubber July futures are trading positive at ¥499.20 per Kg. However, down spot market activity might pressurize the prices initially. Thus, on cues from international and domestic market futures are likely to trade on a mixed note today.
Factors to Watch For
Shanghai market will resume trade tomorrow after the weeklong holiday due to Lunar New Year. Natural-rubber inventories monitored by the Shanghai Futures Exchange is reported around at 58,673 tons, which is down by 61 % from last year’s highest inventories of 151,832 tons
According to the Rubber Research Institute of Thailand, Farmers reduce tapping during the wintering period from February to May, when rubber trees shed leaves and latex production declines. Some plantation areas in northeast Thailand have already entered the low-output season
According to the Rubber Research Institute of Thailand, the Thai physical price remained at a record 184.05 baht ($5.97) per kilogram yesterday
According to the Association of Natural Rubber Producing Countries, Natural-rubber consumption in China may rise 9% to 3.6 million tons this year and India’s consumption may gain 5.2% to 991,000 tons
According to China Association of Automobile Manufacturers, Car-sales growth in China will be around 10 to 15 percent this year Total auto sales, which include cars, trucks and buses, jumped 32 percent last year to 18.06 million
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February contract, prices and open interest are falling while volumes are rising. Market is running out of traders willing to open or hold an open sell/short. Traders are liquidating both loosing buy positions & closing winning short positions. Prices are likely to remain volatile to down.
Japan Futures (TOCOM)
The TOCOM active June contract, prices and volumes have fell while open interest has increased. It is a good indication that a sharp rally against downtrend will develop creating a sell point for downtrend.
Courtesy: Karvy Commtrade Ltd.
(Source: http://www.commodityonline.com/futures-trading/technical/NMCE-Rubber-drops-on-short-selling-21766.html)
Rubber factory fined for air pollution
Posted: 08 Feb 2011 03:03 PM PST
The Department of Environment (DoE) in an enforcement drive yesterday fined the authorities of a rubber factory Tk 7 lakh for polluting the environment in its surrounding areas in Tejgaon industrial area.
This is for the first time DoE punished the authorities of any factory for odour pollution under the environment act, says a DoE media release.
According to the department, Northern Rubber Manufacturing Company Ltd has been polluting the surrounding areas where 120 families reside.
The department ordered to shut the factory's Reclaim Rubber Unit which emantes the malodour.
Led by Muhammed Munir Chowdhury, director (enforcement) of DoE, a team conducted the drive in the factory following complaints from residents of North Kunipara and Shantiniketan areas.
During the drive, the team found that the factory is emanating extreme malodour while recycling old rubber materials. Besides, the factory employees, workers and nearby residents are facing severe environment pollution as small particles of rubber are being discharged into the air.
The team also found that the factory authorities did not take any effective measure to control the pollution.
The factory is of the red-class category according to the environment act, as it manufactures rubber sheets, adhesive, and foam.
The DoE directed the factory authorities to install bio-filter, and dust collector to stop the pollution.
The factory authorities pledged to implement all the directives, the release added.
(Source: http://www.thedailystar.net/newDesign/news-details.php?nid=173495)
The Price Crisis Part IV: China Stretches Rubber Demand
Posted: 08 Feb 2011 02:48 PM PST
China has announced that it would put a cap on new vehicle registration in Beijing. It is the price the country is paying for its rapid economic growth. The high demand for personal vehicles has resulted in urban gridlock. It also has led to the inevitable rise in demand for more tires. The result has been soaring rubber prices that have hit record levels due to tight supplies.
China has become the world’s largest producer of automobiles and tyres. It is ranked as the world’s top rubber consumer. However, the full potential of its vehicle market is yet to develop.
While in the U.S., vehicles per 1,000 people is about 760, in China that ratio is 130. As more Chinese prosper, vehicle demand will also go up. So will the demand for rubber.
It is reckoned that when the per capita GDP touches about US$1,000, a country can expect to see its households going for car purchases. In 2001 when China hit this income figure, the demand for vehicles saw a spurt.
Soaring income is still driving up auto sales. China vehicle sales are set to outstrip the U.S. for the third consecutive year in 2011, when they are likely to hit 20 million. The sales in the first 11 months of 2010 have hit 16.4 million units and were expected to reach 18 million by 2010’s end, according to the China Association of Automobile Manufacturers.
It was in 2009 that China overtook the U.S. as the world’s biggest car market with sales growing at an incredible pace of 45% to touch 13.6 million units. This kind of explosive growth has pushed tire and rubber demand to stratospheric levels.
Even the new vehicle registration norms, which could be extended to various other cities to reduce the traffic gridlock, might have only a mild initial impact because the cap on vehicles will come at a time when more Chinese are going up the income ladder on the back of robust economic growth.
The tire demand in the aftermarket is also on healthy ground. Vehicle owners have replaced about 100 million tires in 2009, which represented about 11% of global sales. The demand for replacement tires is about twice that for OEM tires, accounting for over 2/3 shares in the domestic tire market.
China, which would need more rubber to meet the rising demand from tire and auto makers, is already facing depleted stocks. It has prompted the country to rush to the international market, pushing up the prices further.
According to Singapore-based International Rubber Study Group, global demand for natural and synthetic rubber will expand about 40% to 33.9m tons by 2020 driven by usage in China and India.
It said the world consumption may total 24.3 million tons in 2010, 15.3% higher than in 2009, and it would gain a further 6.3% in 2011.
Rain Havoc
As rains lashed Thailand, the world’s top rubber producer, the market shook further scrambling for more stocks.
Besides demand from China, the rise in crude oil prices, which hit US$91 a barrel late December 2010 on signs of recovery in the U.S. economy, also has shown its impact on rubber prices.
Despite the tough tariff on Chinese tires by the U.S., manufacturers are finding new markets, which have sustained their accelerated production. Exports have in fact jumped 30% in the first six months from a year earlier to 86.68 million units as demand from developing countries outweighed lost sales in the U.S., analysts have said.
The demand for tires, which is on an upswing, will put more pressure on rubber. China has seen lower production due to severe drought in Yunnan region at the beginning of 2010 and recent heavy rains in Hainan, the top two rubber production centers in the country.
Although tire exports have been booming, China is also focusing on developing the domestic market. It has achieved economies of scale because of the large volume production.
China has become the global tire manufacturing center, and particularly since 2004, both production and export volumes have catapulted the country to the top slot in the world.
With an expected annual growth rate of over 20% in the coming years, Chinese vehicle market would continue to drive the demand for rubber and tires. Even multinational companies, which are seeing mature markets shrink, are setting up or expanding tire and rubber production facilities in China. Already their output exceeded 50% share in the domestic market, particularly in the high-end high-performance tire segment.
Analysts point out that vehicle caps as in Beijing or withdrawal of incentives may not dampen the demand scenario.
China Automobile Industry Association has indicated that vehicle buying incentives will likely expire at the end of December as originally planned. The government had slashed a 10% tax on car sales to 5% in 2009 and then raised the rate to 7.5% in 2010, which helped sales soar 34% to 16.4 million through November.
In other words, nobody thinks rubber prices would come down now that crude oil prices are also inching up. What is worse, the rains in Thailand, Indonesia and Malaysia, the top three rubber producers, have hampered tapping resulting in lower output.
With rising vehicle demands in China, the rubber supply shortage is set to worsen as the low-production season starts in major growing countries early next year. There is unlikely to be any respite to the scorching rubber price increases.
(Source: http://www.tirereview.com/Article/84069/the_price_crisis_part_iv_china_stretches_rubber_demand.aspx)
Spot rubber remains steady
Posted: 08 Feb 2011 02:47 PM PST
KOTTAYAM, FEB. 8:
Spot rubber finished almost unchanged on Tuesday. The market lost its direction as the domestic futures declined recording moderate losses in all its contracts on the NMCE. Gains in global rubber rates failed to enhance the sentiments but the prices managed to sustain at current levels lacking quantity sellers on any grade.
Sheet rubber closed flat at Rs 237 a kg both at Kottayam and Kochi according to traders and Rubber Board. Meanwhile RSS 5 lost marginally on comparatively low demand. The overall volumes were dull.
FUTURES DECLINE
The February series declined to Rs 232.50 (236.77), March to Rs 237 (241.91), April to Rs 246.00 (250.57) and May to Rs 249 (254) a kg for RSS 4 on the National Multi Commodity Exchange (NMCE).
The volumes totalled 15070 lots and open interest 13358 lots. The turnover was Rs 364.94 crores.
RSS 3 (spot) closed firm at Rs 275.61 (272.82) a kg at Bangkok. The February futures for RSS 3 improved to ¥503 (Rs 277.49) from ¥498.7 during the day session and then to ¥506 (Rs 279.15) a kg in the night session on the Tokyo Commodity Exchange (TOCOM).
Spot rates were (Rs/kg): RSS-4: 237 (237); RSS-5: 226 (227); ungraded: 221 (221); ISNR 20: 231 (231) and latex 60 per cent: 152 (152).
(Source: http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article1168387.ece)
Posted: 08 Feb 2011 11:10 PM PST
RUBBER climbed to a record as the Shanghai market surged after the Lunar New Year break, raising speculation demand for the commodity used in tires from the world’s largest consumer will keep expanding.
The July-delivery contract gained as much as 1.7 per cent to 507.5 yen a kilogram ($6,162 a metric ton) before trading at 503.2 yen on the Tokyo Commodity Exchange at 11:15 a.m. Futures in Shanghai surged 4.3 per cent to an all-time high.
China increased interest rates for the third time in four months yesterday to curb inflation. The People’s Bank of China raised the one-year lending rate by a quarter point to 6.06 per cent and the one-year deposit rate an equivalent amount to 3 per cent.
Premier Wen Jiabao’s government has yet to return rates to pre-crisis levels, seeking to sustain the economy’s rebound to growth of about 10 per cent.
“The moderate increases in Chinese rates are unlikely to derail the nation’s economy from expansion,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said today by phone. “Rubber extended gains amid speculation demand from China will continue to grow.”
The Chinese central bank moved on the last day of the week-long holiday and before a report next week that may show consumer prices rose 5.3 per cent in January, according to the median estimate in a Bloomberg News survey of economists.
Government figures expected next week are also forecast to show China’s export growth accelerated in January and producer prices advanced at a faster pace, according to Bloomberg surveys.
Rubber futures have gained 22 per cent this year, extending last year’s 50 per cent rally, as rising car sales led by China and India boosted demand for tires.
Output from Thailand, Indonesia and Malaysia, which account for about 70 per cent of global rubber supply, were curbed as a La Nina has led to higher-than-average rains in parts of Southeast Asia. The weather event started in June and usually lasts for nine months or more.
Supply is expected to decline in coming months as the low- production period will start in major growing areas in Thailand, Saito at Fujitomi said. Farmers reduce tapping during the so- called wintering period from February to May, when trees shed leaves and latex production drops. Thai rubber output declines as much as 60 per cent during wintering compared with peak levels, according to the Association of Natural Rubber Producing Countries.
The physical price of natural rubber in Thailand, the world’s largest exporter, extended gains to an all-time high of 187.80 baht ($6.12) per kilogram, boosted by strong demand from local and overseas buyers amid concerns over supply shortages, Rubber Research Institute of Thailand said today.
In Shanghai, May-delivery rubber climbed to a record 43,500 yuan ($6,608) a ton before trading at 42,540 yuan at the 11:30 - a.m. local time break.
Natural-rubber consumption in China may rise 9 per cent to 3.6 million tons this year, while rubber use in India may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries. – Bloomberg
(Source: http://www.btimes.com.my/Current_News/BTIMES/articles/20110209124136/Article/index_html)
Rubber futures rebound on speculation China may replenish stockpiles
Posted: 08 Feb 2011 10:35 PM PST
Tuesday on speculation that Chinese companies will replenish depleted stockpiles, Bloomberg reported. Inventories monitored by the Shanghai Futures Exchange are down 61% year-on-year. Additional market support is provided by a seasonal phenomenon called the wintering period, during which time farmers reduce rubber tapping.
Thai rubber output declines as much as 60% during this period compared to peak levels. Rubber futures are already up 20% so far this year after increasing 50% in 2010, driven by rising car sales in China and India. At the same time, higher-than-average rainfall in Thailand, Indonesia and Malaysia has curbed production. The Thai cash price for rubber hit an all-time high of US$6.06 per kilogram on Tuesday on concern that the wintering period may result in shortages.
(Source: http://www.chinaeconomicreview.com/dailybriefing/2011_02_09/Rubber_futures_rebound_on_speculation_China_may_replenish_stockpiles.html)
Tokyo futures rise further, but weaker oil weighs
Posted: 08 Feb 2011 10:21 PM PST
BANGKOK, Feb 8 - Tokyo rubber futures rose further on Tuesday on the back of concerns on falling supply, but weaker oil prices still weighed on prices, dealers said.
* The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for July delivery rose 8.1 yen, or 1.6 percent, to settle at 498.9 yen per kg.
* Oil prices edged down on Tuesday as transit through the Suez Canal remained unaffected by the political turmoil in Egypt, while expectations of a build-up in U.S. crude inventories also weighed.
* "Players liquidated contracts again after seeing oil prices retreat, preventing rubber futures from breaking another new record," one dealer said.
* The Shanghai rubber futures market is closed and will reopen on Wednesday after a week-long holiday.
* TOCOM rubber futures prices were expected to rise further on Wednesday, as fears on falling supply was likely to provide supports, dealers said. (Reporting by Apornrath Phoonphongphiphat; Editing by Jason Szep)
(Source: http://asia.news.yahoo.com/rtrs/20110203/tap-markets-asia-rubber-c3bb44c.html)
Shanghai Rubber Hits Record High Above 41,850 Yuan
Posted: 08 Feb 2011 06:46 PM PST
Benchmark Shanghai rubber futures rose to a record high on Wednesday (February 9) on supply concerns and a surge in the TOCOM futures price, which also hit a record high earlier in the day.
The most active Shanghai rubber futures contract for May delivery rose as high as 43,500 yuan per tonne, climbing above the previous high of 41,850 yuan hit on Jan. 31.
The strong rises come after China moved for the second time in six weeks to rein in its surging inflation with an interest rate rise.
(Reuters, February 9, 2011)
Kumho Schedules Price Increases For March 1
Posted: 08 Feb 2011 06:45 PM PST
Kumho Tire U.S.A. Inc. will raise prices on all passenger, light truck and medium truck tires effective March 1. Kumho says the details of this increase will be provided to its customers in the near future.
"The unprecedented increase in raw material costs over the past few months have made it absolutely essential for Kumho to implement this increase," says the company.
Kumho last raised its consumer and truck tire prices -- up to 6.5% -- on Nov. 1, 2010.
Kumho is the latest tire manufacturer to announce an upcoming price increase.
Consumer
Goodyear Tire & Rubber Co. will raise consumer tire prices on March 1. The increase, up to 6%, will apply to all brands in the United States and Canada.
Falken Tire Corp. also will raise prices on March 1. The price hikes on Falken passenger and light truck tires will range from 5% to 8% depending on the size, with in-line adjustments as needed.
Bridgestone Americas Tire Operations LLC will raise replacement and original equipment consumer tire prices one month later, on April 1, The increases on Bridgestone, Firestone and associate brand passenger and light truck tires in the U.S. and Canada will vary up to 8%.
Cooper Tire & Rubber Co. (2.5%) and Michelin North America Inc. ("the increases will vary by product line") raised consumer tire prices on Feb. 1. Nexen Tire America Inc. (up to 8%) did the same on Jan. 1.
Commercial
The Bridgestone Off Road Tire, U.S. & Canada Commercial Tire Sales division will increase prices on its mining, construction and industrial tires by 12%, "with some in-line adjustments." The increases are scheduled to begin March 1.
The Bridgestone Agricultural Tire, U.S. & Canada Commercial Tire Sales division announced a 4% price increase effective April 1 on the following tires: Firestone agricultural, construction and forestry tires; Bridgestone garden tires; and Regency tires sold in the United States and Canadian replacement markets.
Michelin will increase prices on Michelin brand replacement agricultural tires sold in the U.S. and Canada on March 1. The hikes will be up to 8%.
The company already increased prices on its Michelin earthmover and industrial replacement tires sold in North America up to 7% on Feb. 1. It increased prices on Oliver and MegaMile retread rubber products sold in the U.S. up to 7% on Jan. 3.
CGS Tyres Group (7.5% to 10% on farm and industrial tires), Titan Tire Corp. (up to 8% on farm and OTR tires), Yokohama Tire Corp. (up to 5% on bias and radial OTR tires) and Continental Tire the Americas LLC (up to 8% on truck tires) raised their commercial tire prices on Jan. 1.
(Modern Tire Dealer, February 5, 2011)
NMCE Rubber drops on short selling
Posted: 08 Feb 2011 03:04 PM PST
NMCE rubber futures traded down on strong selling interest on Monday. Futures started the day on lower note on extended selling pressure. TOCOM rubber also traded down and ended lower at ¥499.30 per Kg. Indian spot market also fell by Rs. 100 per quintal. Thus, on cues from international and domestic market rubber futures ended the day on lower note.
The rubber futures are projected to trade range bound on mixed sentiments prevailing in market on Tuesday. TOCOM rubber July futures are trading positive at ¥499.20 per Kg. However, down spot market activity might pressurize the prices initially. Thus, on cues from international and domestic market futures are likely to trade on a mixed note today.
Factors to Watch For
Shanghai market will resume trade tomorrow after the weeklong holiday due to Lunar New Year. Natural-rubber inventories monitored by the Shanghai Futures Exchange is reported around at 58,673 tons, which is down by 61 % from last year’s highest inventories of 151,832 tons
According to the Rubber Research Institute of Thailand, Farmers reduce tapping during the wintering period from February to May, when rubber trees shed leaves and latex production declines. Some plantation areas in northeast Thailand have already entered the low-output season
According to the Rubber Research Institute of Thailand, the Thai physical price remained at a record 184.05 baht ($5.97) per kilogram yesterday
According to the Association of Natural Rubber Producing Countries, Natural-rubber consumption in China may rise 9% to 3.6 million tons this year and India’s consumption may gain 5.2% to 991,000 tons
According to China Association of Automobile Manufacturers, Car-sales growth in China will be around 10 to 15 percent this year Total auto sales, which include cars, trucks and buses, jumped 32 percent last year to 18.06 million
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February contract, prices and open interest are falling while volumes are rising. Market is running out of traders willing to open or hold an open sell/short. Traders are liquidating both loosing buy positions & closing winning short positions. Prices are likely to remain volatile to down.
Japan Futures (TOCOM)
The TOCOM active June contract, prices and volumes have fell while open interest has increased. It is a good indication that a sharp rally against downtrend will develop creating a sell point for downtrend.
Courtesy: Karvy Commtrade Ltd.
(Source: http://www.commodityonline.com/futures-trading/technical/NMCE-Rubber-drops-on-short-selling-21766.html)
Rubber factory fined for air pollution
Posted: 08 Feb 2011 03:03 PM PST
The Department of Environment (DoE) in an enforcement drive yesterday fined the authorities of a rubber factory Tk 7 lakh for polluting the environment in its surrounding areas in Tejgaon industrial area.
This is for the first time DoE punished the authorities of any factory for odour pollution under the environment act, says a DoE media release.
According to the department, Northern Rubber Manufacturing Company Ltd has been polluting the surrounding areas where 120 families reside.
The department ordered to shut the factory's Reclaim Rubber Unit which emantes the malodour.
Led by Muhammed Munir Chowdhury, director (enforcement) of DoE, a team conducted the drive in the factory following complaints from residents of North Kunipara and Shantiniketan areas.
During the drive, the team found that the factory is emanating extreme malodour while recycling old rubber materials. Besides, the factory employees, workers and nearby residents are facing severe environment pollution as small particles of rubber are being discharged into the air.
The team also found that the factory authorities did not take any effective measure to control the pollution.
The factory is of the red-class category according to the environment act, as it manufactures rubber sheets, adhesive, and foam.
The DoE directed the factory authorities to install bio-filter, and dust collector to stop the pollution.
The factory authorities pledged to implement all the directives, the release added.
(Source: http://www.thedailystar.net/newDesign/news-details.php?nid=173495)
The Price Crisis Part IV: China Stretches Rubber Demand
Posted: 08 Feb 2011 02:48 PM PST
China has announced that it would put a cap on new vehicle registration in Beijing. It is the price the country is paying for its rapid economic growth. The high demand for personal vehicles has resulted in urban gridlock. It also has led to the inevitable rise in demand for more tires. The result has been soaring rubber prices that have hit record levels due to tight supplies.
China has become the world’s largest producer of automobiles and tyres. It is ranked as the world’s top rubber consumer. However, the full potential of its vehicle market is yet to develop.
While in the U.S., vehicles per 1,000 people is about 760, in China that ratio is 130. As more Chinese prosper, vehicle demand will also go up. So will the demand for rubber.
It is reckoned that when the per capita GDP touches about US$1,000, a country can expect to see its households going for car purchases. In 2001 when China hit this income figure, the demand for vehicles saw a spurt.
Soaring income is still driving up auto sales. China vehicle sales are set to outstrip the U.S. for the third consecutive year in 2011, when they are likely to hit 20 million. The sales in the first 11 months of 2010 have hit 16.4 million units and were expected to reach 18 million by 2010’s end, according to the China Association of Automobile Manufacturers.
It was in 2009 that China overtook the U.S. as the world’s biggest car market with sales growing at an incredible pace of 45% to touch 13.6 million units. This kind of explosive growth has pushed tire and rubber demand to stratospheric levels.
Even the new vehicle registration norms, which could be extended to various other cities to reduce the traffic gridlock, might have only a mild initial impact because the cap on vehicles will come at a time when more Chinese are going up the income ladder on the back of robust economic growth.
The tire demand in the aftermarket is also on healthy ground. Vehicle owners have replaced about 100 million tires in 2009, which represented about 11% of global sales. The demand for replacement tires is about twice that for OEM tires, accounting for over 2/3 shares in the domestic tire market.
China, which would need more rubber to meet the rising demand from tire and auto makers, is already facing depleted stocks. It has prompted the country to rush to the international market, pushing up the prices further.
According to Singapore-based International Rubber Study Group, global demand for natural and synthetic rubber will expand about 40% to 33.9m tons by 2020 driven by usage in China and India.
It said the world consumption may total 24.3 million tons in 2010, 15.3% higher than in 2009, and it would gain a further 6.3% in 2011.
Rain Havoc
As rains lashed Thailand, the world’s top rubber producer, the market shook further scrambling for more stocks.
Besides demand from China, the rise in crude oil prices, which hit US$91 a barrel late December 2010 on signs of recovery in the U.S. economy, also has shown its impact on rubber prices.
Despite the tough tariff on Chinese tires by the U.S., manufacturers are finding new markets, which have sustained their accelerated production. Exports have in fact jumped 30% in the first six months from a year earlier to 86.68 million units as demand from developing countries outweighed lost sales in the U.S., analysts have said.
The demand for tires, which is on an upswing, will put more pressure on rubber. China has seen lower production due to severe drought in Yunnan region at the beginning of 2010 and recent heavy rains in Hainan, the top two rubber production centers in the country.
Although tire exports have been booming, China is also focusing on developing the domestic market. It has achieved economies of scale because of the large volume production.
China has become the global tire manufacturing center, and particularly since 2004, both production and export volumes have catapulted the country to the top slot in the world.
With an expected annual growth rate of over 20% in the coming years, Chinese vehicle market would continue to drive the demand for rubber and tires. Even multinational companies, which are seeing mature markets shrink, are setting up or expanding tire and rubber production facilities in China. Already their output exceeded 50% share in the domestic market, particularly in the high-end high-performance tire segment.
Analysts point out that vehicle caps as in Beijing or withdrawal of incentives may not dampen the demand scenario.
China Automobile Industry Association has indicated that vehicle buying incentives will likely expire at the end of December as originally planned. The government had slashed a 10% tax on car sales to 5% in 2009 and then raised the rate to 7.5% in 2010, which helped sales soar 34% to 16.4 million through November.
In other words, nobody thinks rubber prices would come down now that crude oil prices are also inching up. What is worse, the rains in Thailand, Indonesia and Malaysia, the top three rubber producers, have hampered tapping resulting in lower output.
With rising vehicle demands in China, the rubber supply shortage is set to worsen as the low-production season starts in major growing countries early next year. There is unlikely to be any respite to the scorching rubber price increases.
(Source: http://www.tirereview.com/Article/84069/the_price_crisis_part_iv_china_stretches_rubber_demand.aspx)
Spot rubber remains steady
Posted: 08 Feb 2011 02:47 PM PST
KOTTAYAM, FEB. 8:
Spot rubber finished almost unchanged on Tuesday. The market lost its direction as the domestic futures declined recording moderate losses in all its contracts on the NMCE. Gains in global rubber rates failed to enhance the sentiments but the prices managed to sustain at current levels lacking quantity sellers on any grade.
Sheet rubber closed flat at Rs 237 a kg both at Kottayam and Kochi according to traders and Rubber Board. Meanwhile RSS 5 lost marginally on comparatively low demand. The overall volumes were dull.
FUTURES DECLINE
The February series declined to Rs 232.50 (236.77), March to Rs 237 (241.91), April to Rs 246.00 (250.57) and May to Rs 249 (254) a kg for RSS 4 on the National Multi Commodity Exchange (NMCE).
The volumes totalled 15070 lots and open interest 13358 lots. The turnover was Rs 364.94 crores.
RSS 3 (spot) closed firm at Rs 275.61 (272.82) a kg at Bangkok. The February futures for RSS 3 improved to ¥503 (Rs 277.49) from ¥498.7 during the day session and then to ¥506 (Rs 279.15) a kg in the night session on the Tokyo Commodity Exchange (TOCOM).
Spot rates were (Rs/kg): RSS-4: 237 (237); RSS-5: 226 (227); ungraded: 221 (221); ISNR 20: 231 (231) and latex 60 per cent: 152 (152).
(Source: http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article1168387.ece)
Wednesday, February 9, 2011
Tokyo Futures Rise On Supply Concerns, Near Record
Tokyo Futures Rise On Supply Concerns, Near Record
Posted: 08 Feb 2011 12:14 AM PST
Key Tokyo rubber futures rose on Tuesday (February 8) as supply concerns remained, staying within sight of a record high hit late last week.
The benchmark rubber contract on the Tokyo Commodity Exchange for July delivery rose 8.2 yen or 1.7 percent to 499 yen per kg as of 0010 GMT. The contract hit a record high 504 yen on Friday (February 4).
Tokyo rubber futures fell 2.4 percent on Monday (February 7) on weaker oil prices and profit-taking as players liquidated contracts after prices failed to stay firmly above major resistance of 500 yen, but tight supply still lent support, dealers said.
The Shanghai rubber futures market is closed and will reopen on Wednesday (February 9) after a week-long holiday.
Benchmark Thai RSS3 was still being offered at the record high of $6.10 per kg on Monday (February 7) despite a fall in Tokyo futures, reflecting strong demand amid tight supply.
Oil prices steadied on Tuesday (February 8) after falling sharply the day before when concerns about Egypt's political turmoil affecting oil flows in the region eased and investors' focus returned to rising U.S. inventories and a tepid employment picture.
The euro held steady on Tuesday (February 8), having recovered from a fall caused by weak German industrial data the day before.
(Reuters, February 8, 2011)
Rubber climbs on Chinese demand cues
Posted: 08 Feb 2011 12:13 AM PST
TOKYO (Commodity Online) : Speculative behavior of markets has propped up rubber prices driven by a demand surge subsequent to a drop in prices.
The speculators bought the commodity in abundance on belief that China would increase purchases after the Lunar Holiday ends on Wednesday.
The July contract rubber climbed 2.1% to $6,090 a metric ton (501.3 yen a kilogram) on the Tokyo Commodity Exchange and was seen trading at 499.3 yen as of 11:57 a.m.
The consumption of natural rubber in China is expected to rise to 3.6 million tons this year, a surge of 9%, reported Businessweek. China will kick start trade on Wednesday after a week of holiday.
Meanwhile, India consumption of rubber will gain 5.2 % to 991,000 tons, it is expected.
Generally, rubber users tend to increase stockpiles before the low production period which is currently in the offing in major producing states.
The February-May slump in production is attributed to wintering, when rubber trees shed leaves and latex output comes down. Thailand is undergoing this phase and this has significantly reduced market inflow of rubber.
Besides, La Nina has led to torrential rains in parts of Southeast Asia reducing supplies from Thailand, Indonesia and Malaysia; countries that constitute 70 percent of global natural rubber supply.
Meanwhile, India’s natural rubber output has surged 2.8% during the ten months ending January even as production stood at 749,950 metric tons between April and January, compared with 729,250 tons Y-O Y.
Output for January was at 98,800 tons compared to 97,500 tons a year earlier.
(Source: http://www.commodityonline.com/news/Rubber-climbs-on-Chinese-demand-cues-36308-3-1.html)
Tokyo futures rise further, but weaker oil weighs
Posted: 08 Feb 2011 12:12 AM PST
BANGKOK, Feb 8 - Tokyo rubber futures rose further on Tuesday on the back of concerns on falling supply, but weaker oil prices still weighed on prices, dealers said.
* The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for July delivery rose 8.1 yen, or 1.6 percent, to settle at 498.9 yen per kg.
* Oil prices edged down on Tuesday as transit through the Suez Canal remained unaffected by the political turmoil in Egypt, while expectations of a build-up in U.S. crude inventories also weighed.
* "Players liquidated contracts again after seeing oil prices retreat, preventing rubber futures from breaking another new record," one dealer said.
* The Shanghai rubber futures market is closed and will reopen on Wednesday after a week-long holiday.
* TOCOM rubber futures prices were expected to rise further on Wednesday, as fears on falling supply was likely to provide supports, dealers said. (Reporting by Apornrath Phoonphongphiphat; Editing by Jason Szep)
Japan Rubber Stocks Up 3 Pct To Jan 31 Vs Jan 20
Posted: 08 Feb 2011 12:09 AM PST
Japan's crude rubber inventories rose nearly 3 percent by Jan. 31 from Jan. 20, Rubber Trade Association of Japan data showed on Tuesday (February 8).
Crude rubber stocks totalled 8,122 tonnes as of Jan. 31, up 219 tonnes or 2.8 percent from 7,903 tonnes as of Jan. 20. Inventories rose on Jan. 10 for the first time in two months.
The latest level was also up 11 percent from a year earlier, when crude rubber stocks stood at 7,288 tonnes.
Crude rubber stocks fell late last year, raising concerns over supply shortages as bad weather in rubber producing countries disrupted output.
They marked a record low of 2,628 tonnes on July 20, 2010.
Rubber inventories hit a 2010 peak of 8,222 tonnes on Feb. 28, the highest since July 20, 2009.
Rubber Climbs to Near Record as China May Increase Purchases
Posted: 07 Feb 2011 07:25 PM PST
Rubber increased as a price decline yesterday spurred investors to buy amid speculation China, the world’s largest user, may step up purchases after the New Year holiday to replenish stockpiles.
The July-delivery contract gained as much as 2.1 percent to 501.3 yen a kilogram ($6,090 a metric ton) before trading at 499.3 yen on the Tokyo Commodity Exchange as of 11:57 a.m. The most-active contract had the biggest one-day drop since Jan. 26 yesterday, retreating from a record 504 yen reached Feb. 4.
China will resume trade tomorrow after the weeklong holiday. Natural-rubber inventories monitored by the Shanghai Futures Exchange stood at 58,673 tons, 61 percent below last year’s peak of 151,832 tons, the bourse said Feb. 1.
“Rubber is buoyed by expectations that Chinese buying may gather pace,” Kazunori Kokubo, general manager at Tokyo-based broker Yutaka Shoji Co., said today by phone. “The approach of wintering is another support to the market.”
Farmers reduce tapping during the so-called wintering period from February to May, when rubber trees shed leaves and latex production declines. Some plantation areas in northeastThailand have already entered the low-output season, according to the Rubber Research Institute of Thailand.
Rubber users tend to increase stockpiles of raw material before the low-production period begins in major growing areas. Thai rubber production usually shrinks as much as 60 percent from peak levels, according to the Association of Natural Rubber Producing Countries.
La Nina
Rubber futures have gained 20 percent this year, extending last year’s 50 percent rally, as rising car sales led by China and India improved demand for tires. Supplies from Thailand, Indonesiaand Malaysia, the top growers representing 70 percent of global supply, were curbed as a La Nina has led to higher- than-average rains in parts of Southeast Asia. The weather event started in June and usually lasts for nine months or more.
The Thai physical price remained at a record 184.05 baht ($5.97) per kilogram yesterday, supported by car sales and supply concerns, the Rubber Research Institute of Thailand said.
The Shanghai market is closed for the Lunar New Year holiday. May-delivery rubber in Shanghai climbed to a record 41,850 yuan ($6,350) a ton on Jan. 31.
Natural-rubber consumption in China may rise 9 percent to 3.6 million tons this year, while rubber use in India may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries.
Natural-rubber output in India, the fourth-biggest producer, gained 2.8 percent in the 10 months through January as favorable weather and record prices boosted production, the state-run Rubber Board said yesterday.
Production totaled 749,950 metric tons in the April-January period, compared with 729,250 tons a year earlier, the board said in an e-mailed statement. Output was 98,800 tons last month, little changed from 97,500 tons a year earlier, it said.
(Source: http://www.bloomberg.com/news/2011-02-08/rubber-climbs-to-near-record-on-speculation-china-may-increase-purchases.html)
Rubber output rises on record prices, weather
Posted: 07 Feb 2011 02:37 PM PST
Natural-rubber output in India, the fourth-biggest producer, gained 2.8% in the 10 months through January as favourable weather and record prices boosted production, the state-run Rubber Board said.
Production totaled 749,950 tonne in the April-January period, compared with 7,29,250 tonne a year earlier, the board said in an e-mailed statement on Monday. Output was 98,800 tonne last month, little changed from 97,500 tonne a year earlier, it said.
Rubber prices in India climbed to a record this year as supplies from Thailand, Indonesia and Malaysia, the top growers representing 70% of global supply, were curbed by rain, while rising car sales boosted demand for tyres. Futures have gained 18% on the Tokyo Commodity Exchange to a record this year, extending last year’s 50% rally.
“Overall, the bullish price structure continues, and it will be a while before prices ease substantially,” Anand James, chief analyst at brokerage Geojit Comtrade, said in an interview. “Sellers were inclined to hold back their stocks in anticipation of lean-season demand, with Thailand, India and Indonesia entering wintering period,” he said.
Prices in India may reach Rs 270 a kg between March and May as demand from tyre makers remains firm, he said. Immediate-delivery rubber prices gained 0.4% to Rs 23,800 per 100 kg on Monday, according to data from the Multi Commodity Exchange of India.
(Source: http://www.financialexpress.com/news/rubber-output-rises-on-record-prices-weather/747246/0)
The Price Crisis Part III: Futures for Price Discovery
Posted: 07 Feb 2011 02:26 PM PST
Indian tire manufacturers are still wary of the futures market in rubber and their skepticism has become stronger with rising prices and high duties on imports. But Anil Mishra, CEO of Ahmadabad-based National Multi-Commodity Exchange of India Ltd., the pioneer in electronic commodity trade, says many tiremakers are realizing futures' advantages
The Ahmadabad-based commodity bourse, National Multi-Commodity Exchange of India Ltd, has come out in the open refuting allegations by Automotive Tyre Manufacturers Association (ATMA) that NMCE is manipulating rubber futures prices. NMCE CEO Anil Mishra said ATMA allegations are incorrect and baseless pointing out that the price movements in the natural rubber futures is not because of manipulation but on account of supply-demand mismatch.
Rubber prices have hit an all-time high and there is no sign they are going to come down, at least in the coming few years. Prices climbed to a record as rain cut production in Southeast Asia, worsening a shortage as demand continually expands in China and India.
“The tightness of supply and burgeoning demand from India and China would keep rubber price trend higher but it would be moving up and down within a range,” Mishra told Polymers & Tyre Asia.
“This price movement within a rising band would be more in the futures market than in spot market because in futures market, besides physical commercial players, there are non-commercial players also who do not hold on to one price view and keep responding to the daily and weekly news whereas in spot market there are mostly commercial players who hold on to one price view for quite some time and are slow in responding to the news,” he said.
This rise and fall gives opportunity to various commercial players to hedge on the exchange, he explained.
It is expected that tiremakers may rush to buy rubber while it is available as output will drop in view of wintering, which is the low-production season from February to April. With rains lashing Thailand, the world’s top rubber producer, there is no signal that prices are likely to fall.
It is in this context that Mishra is keen to address the concerns of tiremakers who fear that futures trading contribute to speculation leading to market volatility.
“Many tire manufacturers have started partially participating but since in futures market price goes both up and down they think it is more speculative,” he said.
Non-commercial players work on thin margin and respond very quickly to the information, which has bearing on the price but commercial players do not respond so quickly.
Remove Restrictions
“Many tire players have informed us that they are not allowed to sell on the exchange and they can only buy. This restriction limits their operation and should be removed,” the Mishra said.
“When they are hedging their future need, they should not be required to take delivery only from the exchange,” he felt. “Exchange should be used more for price risk management. They should be allowed to sell their futures position when they buy from their preferred suppliers in the physical market.”
This enabling provision is must to allow large-scale hedging by the tire manufacturers and then they could fully experience positive benefits of futures market, Mishra said. “The analysis of our data shows that more than 80% of time the daily price volatility has been within 2%.”
In a five-year time frame, Mishra thinks there would be good growth on all fronts in India’s rubber market. This will be due to improved price.
“There would be investment in agri inputs in rubber plantations resulting in increase in productivity and production, better upkeep of plantations, old trees would be replaced by young trees and more investment is likely to come from investors in the plantation sector,” he forecast.
Synthetic rubber production is also increasing, which is a natural process of substitutes in economic values that will keep on striking a right balance between increase in demand, capacities and production.
“We would like to point out the threat of escalating land prices as reality is booming is also a factor that has to be kept in mind and increased labor cost will all have impact,” the NMCE CEO said.
There would be increased participation in futures market for price discovery and price risk management. In India more cooperatives and banks would start playing the role of aggregators and more innovations would come with amendment in Forward Contracts (Regulation) Act.
Options would be introduced which would help the commercial players, both producers and user industry, immensely in having guaranteed assured price when the market moves against them and also have additional benefit if the market moves in their favor, Mishra pointed.
Stock Position
Commenting on ATMA’s statement doubting rubber stock figures given out officially by government agencies, which are in variance with the ground situation, he said NMCE is not as equipped as Rubber Board to give better crop forecast. “Hence it would not be proper on our part to make such sweeping comments,” Mishra said. But since the demand is not being fully met, tightness in availability is being observed.
“Hence there is a general feeling that stocks may not be as high as is being reported otherwise it should have come out at these high prices.”
It is important to note that Rubber Board gets monthly return of production, sales, purchase, consumption and stocks figures every month from licensed plantations, dealers, manufactures for regulation and collection of cess from consumers.
“As per Rubber Board’s response these high stocks figures are as reported by producers themselves, which could be obvious.”
The function of NMCE is to provide transparent market for price discovery and price risk management by bringing all types of market participants with varied interests from all over India on a single platform whose interplay could together give the fair view of rubber price. One group doesn’t influence the price.
Farmers, cooperatives, traders, investors, industry users, day traders, speculators, arbitrageurs all participate and they never have uniform views and that’s how this market remains liquid and vibrant, Mishra said.
The best buyer gets to buy and the best seller gets to sell which is decided electronically without human intervention based on bids and offers.
Stakeholder Interest
NMCE is continuously interacting with all the stakeholders and arranging training programs for them along with FMC, the commodity markets regulator, as well as independently to remove the myths and explain how best they could utilize the futures market.
“Our members are also educating their clients. NMCE is keen in promoting RSS 5 futures for over 5000 Indian small and medium enterprises now as they are most vulnerable to the price volatility and have been misled by vested interests,” Mishra explained.
NMCE is also promoting sellers and buyers warehouse delivery to further smooth the process and bring cost-efficiency.
On comments by some tire producers that they cannot afford dedicated staff for futures trading and get into market operations, Mishra is of the view that such staff would be required only if one takes position and speculates in the market.
“If one is hedging, it is like buying ones requirement from other alternative market; instead of buying in the physical market, the tire company can buy on the futures market, where they can buy forward without any risk of default and can swap one’s futures position with physical from their preferred supplier,” Mishra pointed out.
The purchase manager who buys physical could buy futures depending on whichever is cheaper and thus no dedicated staff is required. If tiremakers get global traders who could give them assured forward price with no default, their strategy could be different. “In India we don’t have such strong deep pocket traders, who could guarantee future price and delivery.”
Market Experience
Indian tire manufacturers could perhaps learn from the experience of rubber futures market in other Asian countries, as that would certainly be the way market would function in a well-regulated situation like in India.
“Rubber futures market is very active in Shanghai and Tokyo where the volume is very large because speculative participation is very large,” Mishra said.
The crude price and yen to dollar strength also has great bearing in TOCOM. Shanghai market has its own fundamental factors of high demand and the availability for imports, duty structure etc coupled with high speculative participation.
“Indian market is more regulated in terms of open interest, daily price limit; currently only four months forward is active,” he said.
ATMA had taken up the issue of futures with regulator FMC about price manipulation in NR trade at the NMCE platform and sought either temporary ban on futures trade in rubber or cut in daily price band. After FMC, it observed that ATMA’s allegation was wrong and without any evidence.
Mishra commented: “The daily price band for natural rubber has been kept lowest at 4% in India as compared to 5% in Shanghai and 10% in Singapore. If we reduce from 4% to 1%-2%, then trade can hardly take place on the exchange.”
At present, a large number of farmers are participating in the rubber futures trade through cooperatives, he said adding that on an average, 7,000 tons of rubber is traded daily on the exchange platform.
Obviously the high prices are due to demand-supply mismatch. (Courtesy of Polymers & Tyre Asia)
Spot rubber remains steady
KOTTAYAM, FEB. 8:
Spot rubber finished almost unchanged on Tuesday. The market lost its direction as the domestic futures declined recording moderate losses in all its contracts on the NMCE. Gains in global rubber rates failed to enhance the sentiments but the prices managed to sustain at current levels lacking quantity sellers on any grade.
Sheet rubber closed flat at Rs 237 a kg both at Kottayam and Kochi according to traders and Rubber Board. Meanwhile RSS 5 lost marginally on comparatively low demand. The overall volumes were dull.
FUTURES DECLINE
The February series declined to Rs 232.50 (236.77), March to Rs 237 (241.91), April to Rs 246.00 (250.57) and May to Rs 249 (254) a kg for RSS 4 on the National Multi Commodity Exchange (NMCE).
The volumes totalled 15070 lots and open interest 13358 lots. The turnover was Rs 364.94 crores.
RSS 3 (spot) closed firm at Rs 275.61 (272.82) a kg at Bangkok. The February futures for RSS 3 improved to ¥503 (Rs 277.49) from ¥498.7 during the day session and then to ¥506 (Rs 279.15) a kg in the night session on the Tokyo Commodity Exchange (TOCOM).
Spot rates were (Rs/kg): RSS-4: 237 (237); RSS-5: 226 (227); ungraded: 221 (221); ISNR 20: 231 (231) and latex 60 per cent: 152 (152).
Posted: 08 Feb 2011 12:14 AM PST
Key Tokyo rubber futures rose on Tuesday (February 8) as supply concerns remained, staying within sight of a record high hit late last week.
The benchmark rubber contract on the Tokyo Commodity Exchange for July delivery rose 8.2 yen or 1.7 percent to 499 yen per kg as of 0010 GMT. The contract hit a record high 504 yen on Friday (February 4).
Tokyo rubber futures fell 2.4 percent on Monday (February 7) on weaker oil prices and profit-taking as players liquidated contracts after prices failed to stay firmly above major resistance of 500 yen, but tight supply still lent support, dealers said.
The Shanghai rubber futures market is closed and will reopen on Wednesday (February 9) after a week-long holiday.
Benchmark Thai RSS3 was still being offered at the record high of $6.10 per kg on Monday (February 7) despite a fall in Tokyo futures, reflecting strong demand amid tight supply.
Oil prices steadied on Tuesday (February 8) after falling sharply the day before when concerns about Egypt's political turmoil affecting oil flows in the region eased and investors' focus returned to rising U.S. inventories and a tepid employment picture.
The euro held steady on Tuesday (February 8), having recovered from a fall caused by weak German industrial data the day before.
(Reuters, February 8, 2011)
Rubber climbs on Chinese demand cues
Posted: 08 Feb 2011 12:13 AM PST
TOKYO (Commodity Online) : Speculative behavior of markets has propped up rubber prices driven by a demand surge subsequent to a drop in prices.
The speculators bought the commodity in abundance on belief that China would increase purchases after the Lunar Holiday ends on Wednesday.
The July contract rubber climbed 2.1% to $6,090 a metric ton (501.3 yen a kilogram) on the Tokyo Commodity Exchange and was seen trading at 499.3 yen as of 11:57 a.m.
The consumption of natural rubber in China is expected to rise to 3.6 million tons this year, a surge of 9%, reported Businessweek. China will kick start trade on Wednesday after a week of holiday.
Meanwhile, India consumption of rubber will gain 5.2 % to 991,000 tons, it is expected.
Generally, rubber users tend to increase stockpiles before the low production period which is currently in the offing in major producing states.
The February-May slump in production is attributed to wintering, when rubber trees shed leaves and latex output comes down. Thailand is undergoing this phase and this has significantly reduced market inflow of rubber.
Besides, La Nina has led to torrential rains in parts of Southeast Asia reducing supplies from Thailand, Indonesia and Malaysia; countries that constitute 70 percent of global natural rubber supply.
Meanwhile, India’s natural rubber output has surged 2.8% during the ten months ending January even as production stood at 749,950 metric tons between April and January, compared with 729,250 tons Y-O Y.
Output for January was at 98,800 tons compared to 97,500 tons a year earlier.
(Source: http://www.commodityonline.com/news/Rubber-climbs-on-Chinese-demand-cues-36308-3-1.html)
Tokyo futures rise further, but weaker oil weighs
Posted: 08 Feb 2011 12:12 AM PST
BANGKOK, Feb 8 - Tokyo rubber futures rose further on Tuesday on the back of concerns on falling supply, but weaker oil prices still weighed on prices, dealers said.
* The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for July delivery rose 8.1 yen, or 1.6 percent, to settle at 498.9 yen per kg.
* Oil prices edged down on Tuesday as transit through the Suez Canal remained unaffected by the political turmoil in Egypt, while expectations of a build-up in U.S. crude inventories also weighed.
* "Players liquidated contracts again after seeing oil prices retreat, preventing rubber futures from breaking another new record," one dealer said.
* The Shanghai rubber futures market is closed and will reopen on Wednesday after a week-long holiday.
* TOCOM rubber futures prices were expected to rise further on Wednesday, as fears on falling supply was likely to provide supports, dealers said. (Reporting by Apornrath Phoonphongphiphat; Editing by Jason Szep)
Japan Rubber Stocks Up 3 Pct To Jan 31 Vs Jan 20
Posted: 08 Feb 2011 12:09 AM PST
Japan's crude rubber inventories rose nearly 3 percent by Jan. 31 from Jan. 20, Rubber Trade Association of Japan data showed on Tuesday (February 8).
Crude rubber stocks totalled 8,122 tonnes as of Jan. 31, up 219 tonnes or 2.8 percent from 7,903 tonnes as of Jan. 20. Inventories rose on Jan. 10 for the first time in two months.
The latest level was also up 11 percent from a year earlier, when crude rubber stocks stood at 7,288 tonnes.
Crude rubber stocks fell late last year, raising concerns over supply shortages as bad weather in rubber producing countries disrupted output.
They marked a record low of 2,628 tonnes on July 20, 2010.
Rubber inventories hit a 2010 peak of 8,222 tonnes on Feb. 28, the highest since July 20, 2009.
Rubber Climbs to Near Record as China May Increase Purchases
Posted: 07 Feb 2011 07:25 PM PST
Rubber increased as a price decline yesterday spurred investors to buy amid speculation China, the world’s largest user, may step up purchases after the New Year holiday to replenish stockpiles.
The July-delivery contract gained as much as 2.1 percent to 501.3 yen a kilogram ($6,090 a metric ton) before trading at 499.3 yen on the Tokyo Commodity Exchange as of 11:57 a.m. The most-active contract had the biggest one-day drop since Jan. 26 yesterday, retreating from a record 504 yen reached Feb. 4.
China will resume trade tomorrow after the weeklong holiday. Natural-rubber inventories monitored by the Shanghai Futures Exchange stood at 58,673 tons, 61 percent below last year’s peak of 151,832 tons, the bourse said Feb. 1.
“Rubber is buoyed by expectations that Chinese buying may gather pace,” Kazunori Kokubo, general manager at Tokyo-based broker Yutaka Shoji Co., said today by phone. “The approach of wintering is another support to the market.”
Farmers reduce tapping during the so-called wintering period from February to May, when rubber trees shed leaves and latex production declines. Some plantation areas in northeastThailand have already entered the low-output season, according to the Rubber Research Institute of Thailand.
Rubber users tend to increase stockpiles of raw material before the low-production period begins in major growing areas. Thai rubber production usually shrinks as much as 60 percent from peak levels, according to the Association of Natural Rubber Producing Countries.
La Nina
Rubber futures have gained 20 percent this year, extending last year’s 50 percent rally, as rising car sales led by China and India improved demand for tires. Supplies from Thailand, Indonesiaand Malaysia, the top growers representing 70 percent of global supply, were curbed as a La Nina has led to higher- than-average rains in parts of Southeast Asia. The weather event started in June and usually lasts for nine months or more.
The Thai physical price remained at a record 184.05 baht ($5.97) per kilogram yesterday, supported by car sales and supply concerns, the Rubber Research Institute of Thailand said.
The Shanghai market is closed for the Lunar New Year holiday. May-delivery rubber in Shanghai climbed to a record 41,850 yuan ($6,350) a ton on Jan. 31.
Natural-rubber consumption in China may rise 9 percent to 3.6 million tons this year, while rubber use in India may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries.
Natural-rubber output in India, the fourth-biggest producer, gained 2.8 percent in the 10 months through January as favorable weather and record prices boosted production, the state-run Rubber Board said yesterday.
Production totaled 749,950 metric tons in the April-January period, compared with 729,250 tons a year earlier, the board said in an e-mailed statement. Output was 98,800 tons last month, little changed from 97,500 tons a year earlier, it said.
(Source: http://www.bloomberg.com/news/2011-02-08/rubber-climbs-to-near-record-on-speculation-china-may-increase-purchases.html)
Rubber output rises on record prices, weather
Posted: 07 Feb 2011 02:37 PM PST
Natural-rubber output in India, the fourth-biggest producer, gained 2.8% in the 10 months through January as favourable weather and record prices boosted production, the state-run Rubber Board said.
Production totaled 749,950 tonne in the April-January period, compared with 7,29,250 tonne a year earlier, the board said in an e-mailed statement on Monday. Output was 98,800 tonne last month, little changed from 97,500 tonne a year earlier, it said.
Rubber prices in India climbed to a record this year as supplies from Thailand, Indonesia and Malaysia, the top growers representing 70% of global supply, were curbed by rain, while rising car sales boosted demand for tyres. Futures have gained 18% on the Tokyo Commodity Exchange to a record this year, extending last year’s 50% rally.
“Overall, the bullish price structure continues, and it will be a while before prices ease substantially,” Anand James, chief analyst at brokerage Geojit Comtrade, said in an interview. “Sellers were inclined to hold back their stocks in anticipation of lean-season demand, with Thailand, India and Indonesia entering wintering period,” he said.
Prices in India may reach Rs 270 a kg between March and May as demand from tyre makers remains firm, he said. Immediate-delivery rubber prices gained 0.4% to Rs 23,800 per 100 kg on Monday, according to data from the Multi Commodity Exchange of India.
(Source: http://www.financialexpress.com/news/rubber-output-rises-on-record-prices-weather/747246/0)
The Price Crisis Part III: Futures for Price Discovery
Posted: 07 Feb 2011 02:26 PM PST
Indian tire manufacturers are still wary of the futures market in rubber and their skepticism has become stronger with rising prices and high duties on imports. But Anil Mishra, CEO of Ahmadabad-based National Multi-Commodity Exchange of India Ltd., the pioneer in electronic commodity trade, says many tiremakers are realizing futures' advantages
The Ahmadabad-based commodity bourse, National Multi-Commodity Exchange of India Ltd, has come out in the open refuting allegations by Automotive Tyre Manufacturers Association (ATMA) that NMCE is manipulating rubber futures prices. NMCE CEO Anil Mishra said ATMA allegations are incorrect and baseless pointing out that the price movements in the natural rubber futures is not because of manipulation but on account of supply-demand mismatch.
Rubber prices have hit an all-time high and there is no sign they are going to come down, at least in the coming few years. Prices climbed to a record as rain cut production in Southeast Asia, worsening a shortage as demand continually expands in China and India.
“The tightness of supply and burgeoning demand from India and China would keep rubber price trend higher but it would be moving up and down within a range,” Mishra told Polymers & Tyre Asia.
“This price movement within a rising band would be more in the futures market than in spot market because in futures market, besides physical commercial players, there are non-commercial players also who do not hold on to one price view and keep responding to the daily and weekly news whereas in spot market there are mostly commercial players who hold on to one price view for quite some time and are slow in responding to the news,” he said.
This rise and fall gives opportunity to various commercial players to hedge on the exchange, he explained.
It is expected that tiremakers may rush to buy rubber while it is available as output will drop in view of wintering, which is the low-production season from February to April. With rains lashing Thailand, the world’s top rubber producer, there is no signal that prices are likely to fall.
It is in this context that Mishra is keen to address the concerns of tiremakers who fear that futures trading contribute to speculation leading to market volatility.
“Many tire manufacturers have started partially participating but since in futures market price goes both up and down they think it is more speculative,” he said.
Non-commercial players work on thin margin and respond very quickly to the information, which has bearing on the price but commercial players do not respond so quickly.
Remove Restrictions
“Many tire players have informed us that they are not allowed to sell on the exchange and they can only buy. This restriction limits their operation and should be removed,” the Mishra said.
“When they are hedging their future need, they should not be required to take delivery only from the exchange,” he felt. “Exchange should be used more for price risk management. They should be allowed to sell their futures position when they buy from their preferred suppliers in the physical market.”
This enabling provision is must to allow large-scale hedging by the tire manufacturers and then they could fully experience positive benefits of futures market, Mishra said. “The analysis of our data shows that more than 80% of time the daily price volatility has been within 2%.”
In a five-year time frame, Mishra thinks there would be good growth on all fronts in India’s rubber market. This will be due to improved price.
“There would be investment in agri inputs in rubber plantations resulting in increase in productivity and production, better upkeep of plantations, old trees would be replaced by young trees and more investment is likely to come from investors in the plantation sector,” he forecast.
Synthetic rubber production is also increasing, which is a natural process of substitutes in economic values that will keep on striking a right balance between increase in demand, capacities and production.
“We would like to point out the threat of escalating land prices as reality is booming is also a factor that has to be kept in mind and increased labor cost will all have impact,” the NMCE CEO said.
There would be increased participation in futures market for price discovery and price risk management. In India more cooperatives and banks would start playing the role of aggregators and more innovations would come with amendment in Forward Contracts (Regulation) Act.
Options would be introduced which would help the commercial players, both producers and user industry, immensely in having guaranteed assured price when the market moves against them and also have additional benefit if the market moves in their favor, Mishra pointed.
Stock Position
Commenting on ATMA’s statement doubting rubber stock figures given out officially by government agencies, which are in variance with the ground situation, he said NMCE is not as equipped as Rubber Board to give better crop forecast. “Hence it would not be proper on our part to make such sweeping comments,” Mishra said. But since the demand is not being fully met, tightness in availability is being observed.
“Hence there is a general feeling that stocks may not be as high as is being reported otherwise it should have come out at these high prices.”
It is important to note that Rubber Board gets monthly return of production, sales, purchase, consumption and stocks figures every month from licensed plantations, dealers, manufactures for regulation and collection of cess from consumers.
“As per Rubber Board’s response these high stocks figures are as reported by producers themselves, which could be obvious.”
The function of NMCE is to provide transparent market for price discovery and price risk management by bringing all types of market participants with varied interests from all over India on a single platform whose interplay could together give the fair view of rubber price. One group doesn’t influence the price.
Farmers, cooperatives, traders, investors, industry users, day traders, speculators, arbitrageurs all participate and they never have uniform views and that’s how this market remains liquid and vibrant, Mishra said.
The best buyer gets to buy and the best seller gets to sell which is decided electronically without human intervention based on bids and offers.
Stakeholder Interest
NMCE is continuously interacting with all the stakeholders and arranging training programs for them along with FMC, the commodity markets regulator, as well as independently to remove the myths and explain how best they could utilize the futures market.
“Our members are also educating their clients. NMCE is keen in promoting RSS 5 futures for over 5000 Indian small and medium enterprises now as they are most vulnerable to the price volatility and have been misled by vested interests,” Mishra explained.
NMCE is also promoting sellers and buyers warehouse delivery to further smooth the process and bring cost-efficiency.
On comments by some tire producers that they cannot afford dedicated staff for futures trading and get into market operations, Mishra is of the view that such staff would be required only if one takes position and speculates in the market.
“If one is hedging, it is like buying ones requirement from other alternative market; instead of buying in the physical market, the tire company can buy on the futures market, where they can buy forward without any risk of default and can swap one’s futures position with physical from their preferred supplier,” Mishra pointed out.
The purchase manager who buys physical could buy futures depending on whichever is cheaper and thus no dedicated staff is required. If tiremakers get global traders who could give them assured forward price with no default, their strategy could be different. “In India we don’t have such strong deep pocket traders, who could guarantee future price and delivery.”
Market Experience
Indian tire manufacturers could perhaps learn from the experience of rubber futures market in other Asian countries, as that would certainly be the way market would function in a well-regulated situation like in India.
“Rubber futures market is very active in Shanghai and Tokyo where the volume is very large because speculative participation is very large,” Mishra said.
The crude price and yen to dollar strength also has great bearing in TOCOM. Shanghai market has its own fundamental factors of high demand and the availability for imports, duty structure etc coupled with high speculative participation.
“Indian market is more regulated in terms of open interest, daily price limit; currently only four months forward is active,” he said.
ATMA had taken up the issue of futures with regulator FMC about price manipulation in NR trade at the NMCE platform and sought either temporary ban on futures trade in rubber or cut in daily price band. After FMC, it observed that ATMA’s allegation was wrong and without any evidence.
Mishra commented: “The daily price band for natural rubber has been kept lowest at 4% in India as compared to 5% in Shanghai and 10% in Singapore. If we reduce from 4% to 1%-2%, then trade can hardly take place on the exchange.”
At present, a large number of farmers are participating in the rubber futures trade through cooperatives, he said adding that on an average, 7,000 tons of rubber is traded daily on the exchange platform.
Obviously the high prices are due to demand-supply mismatch. (Courtesy of Polymers & Tyre Asia)
Spot rubber remains steady
KOTTAYAM, FEB. 8:
Spot rubber finished almost unchanged on Tuesday. The market lost its direction as the domestic futures declined recording moderate losses in all its contracts on the NMCE. Gains in global rubber rates failed to enhance the sentiments but the prices managed to sustain at current levels lacking quantity sellers on any grade.
Sheet rubber closed flat at Rs 237 a kg both at Kottayam and Kochi according to traders and Rubber Board. Meanwhile RSS 5 lost marginally on comparatively low demand. The overall volumes were dull.
FUTURES DECLINE
The February series declined to Rs 232.50 (236.77), March to Rs 237 (241.91), April to Rs 246.00 (250.57) and May to Rs 249 (254) a kg for RSS 4 on the National Multi Commodity Exchange (NMCE).
The volumes totalled 15070 lots and open interest 13358 lots. The turnover was Rs 364.94 crores.
RSS 3 (spot) closed firm at Rs 275.61 (272.82) a kg at Bangkok. The February futures for RSS 3 improved to ¥503 (Rs 277.49) from ¥498.7 during the day session and then to ¥506 (Rs 279.15) a kg in the night session on the Tokyo Commodity Exchange (TOCOM).
Spot rates were (Rs/kg): RSS-4: 237 (237); RSS-5: 226 (227); ungraded: 221 (221); ISNR 20: 231 (231) and latex 60 per cent: 152 (152).
Subscribe to:
Posts (Atom)
