Sheet rubber hits Rs 235/kg on global cues

Sheet rubber hits Rs 235/kg on global cues

KOTTAYAM, FEB. 3:
Physical rubber prices made a glorious rebound on Thursday. The market moved up on strong demand following sharp gains in international and domestic futures mainly the Tokyo Commodities Exchange (TOCOM). According to observers, prices are set to break previous records to create another historic high shortly.

Sheet rubber flared up to Rs 235 (228) a kg, according to market circles. The grade increased to Rs 232 (226.50) a kg both at Kottayam and Kochi, said the Rubber Board.

Though Indian rubber growers do not get the international price on par with their counterparts in other countries, they could export rubber with the help of cooperative societies and escape exploitation of certain business lobbies, said Mr Joshua Daniel, a small grower in Konni, Pathanamthitta, Kerala. The Government also should act to end this discrimination to the producing sector, he appealed.

RSS 4 increased sharply at the February series to Rs 239.05 (231.61), March to Rs 245.25 (236.32), April to Rs 254.38 (246.40) and May to Rs 259.10 (252.78) a kg on the National Multi Commodity Exchange.

The February futures jumped up to ¥495 (Rs 276.28) from ¥480.5 a kg during the day and then to ¥502 (Rs 280.19) in the night session on the TOCOM. RSS 3 (spot) closed firm at Rs 267.71 (265.21) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 235 (228); RSS-5: 225 (219); ungraded: 220 (214); ISNR 20: 227 (222) and latex 60 per cent: 151 (150).



Lower local prices boost rubber exports
Posted: 02 Feb 2011 02:49 PM PST
KOCHI: Export prospects have opened up for natural rubber with domestic prices ruling substantially lower than the international prices. Though shipments started picking up only by November 2010, total exports are likely to catch up with the last financial year’s level.
At a time when the rubber-based industry is busy trying to contract imports, rubber producers in the market are flooded with export orders. “We are getting good export enquiries,” said KK Abraham, president of the Palai Marketing Cooperative Society. The Society is likely to end the year with an export of 5,000 tonne.
Domestic rubber prices are ruling at around Rs 223.50 per kg against international prices which are Rs 265.21 per kg. “The difference of around Rs 40 per kg has resulted in higher exports in the past few months,” said Biju John, CPM Spices Corporation .
He said that exports started picking up from November when domestic prices fell below the international prices. Exports stood at 11,678 tonne during the April-January period against 12,912 tonne during the same period of the previous year. Rubber Board officials said exports would be more or less same as the last year’s 25,090 tonne.
Speaking to ET, Abraham pointed out that rubber producers prefer to sell in the local market as payments are realised faster.
Meanwhile, 31 players have applied to DGFT make use of the special scheme to import 40,000 tonne before March 31 at 7.5% duty. “The industry is going in for imports at a higher price when it can buy rubber here at prices that are lesser by almost Rs 40 per kg,” Biju John said.
The Palai-based Kavanar Latex has exported 8 containers of Indian standard natural rubber. Vijayakumar, the managing director of the company, said orders were pending for another 6 containers. The company will be exporting 500 tonne this year.
The shortage of rubber in the international market has increased the demand for the Indian variety.



Rises In Rubber Prices Backed By A Rally In Oil Prices
Posted: 02 Feb 2011 02:48 PM PST
During 28 Jan. and 1 Feb., rubber futures and physical markets settled mixed. The benchmark contract for July delivery on the bellwether TOCOM fell to 467.60 yen/kg on 1 Feb. from 469.10 yen/kg on 28 Jan. due mainly to the strengthening Japanese yen against the U.S. dollar and some profit-taking ahead of the week-long Lunar New Year holidays in China starting 2 February. However, crude oil futures rebounded during the period caused by concerns about the political protest in Cairo and currently strong market fundamentals could capped the fall.

On the Shanghai futures exchange, the most active rubber contract for May delivery rose from 40,460 yuan/ton on 28 Jan. to 41,390 yuan/ton on 1 Feb. in anticipation and expectation of further rises in commodity prices including crude oil futures, rubber futures, and physical markets after the Chinese Lunar New Year holidays as a dry wintering season has started in major rubber producing countries and investors expect no further monetary tightening measures by China’s central bank in the coming weeks.




Rubber Surges to Record on Supply Concern, Nears 500 Yen/Kg
Posted: 03 Feb 2011 05:10 AM PST
Rubber jumped by the most in three months, rising to a record as crude oil’s rally boosted the appeal of the commodity and rain in Asian growing regions curbed output, raising concern that supply tightness may worsen.

The July-delivery contract gained as much as 3.8 percent before settling at 489.9 yen on the Tokyo Commodity Exchange. In after-hours trading, the most-active contract surged to an all- time high of 499.9 yen a kilogram ($6,120 a metric ton). Transactions in this session will be settled tomorrow.

Oil climbed for a second day as protests in Egypt turned violent, prompting concern that supplies may be disrupted and unrest may spread to other parts of the Middle East. Persistent rainfall inThailand’s key plantation areas has limited supply, according to the Rubber Research Institute of Thailand.

“Tight supply of rubber and a strong auto market boosted the price to a new high,” Gu Jiong, an analyst at commodity broker Yutaka Shoji Co., said by phone from Tokyo. “Oil trading above $90 a barrel is also supportive.”

The most-active contract climbed 12 percent last month, extending last year’s 50 percent rally, as supplies from Thailand, Indonesia and Malaysia, the top three growers representing 70 percent of global supply, were curbed by rain while rising car sales led by China and Indiaimproved demand.

La Nina, which started in June and usually lasts for nine months or more, has led to higher than average rainfall in most parts of Southeast Asia. The weather event’s strength may decrease during the next four months, the Malaysian Meteorological Department said in response to questions, supporting forecasts by the World Meteorological Organization.

‘Major Impact’

The weather event is having a “major impact” on rubber and palm oil production in Malaysia, as heavier rainfall may hamper harvesting and tapping, the Malaysian Meteorological Department said yesterday.

The physical price of natural rubber in Thailand, the world’s largest supplier, advanced to 180.55 baht ($5.84) a kilogram today from 178.55 baht yesterday, the Rubber Research Institute of Thailand said. The price reached a record 181.55 baht on Jan. 25.

Bridgestone Corp., the world’s largest tiremaker, said it will raise tire prices in North America by as much as 8 percent on April 1 because of the increasing cost of raw materials.

The Shanghai market will be closed until Feb. 8 for Lunar New Year holidays. 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 and India’s consumption may gain 5.2 percent to 991,000 tons, according to the Association of Natural Rubber Producing Countries.

China’s natural-rubber inventories rose for the first week in four, adding 126 tons to 58,673 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, theShanghai Futures Exchange said on Feb. 1. That was a 61 percent decline from last year’s peak of 151,832 tons.

Car sales growth in China will be around 10 to 15 percent this year, the China Association of Automobile Manufacturers said Jan. 10. Total auto sales, which include cars, trucks and buses, jumped 32 percent last year to 18.06 million, the association said.