Rubber Slumps To Two-Month Low As Chinese Car Sales Decline

Rubber Slumps To Two-Month Low As Chinese Car Sales Decline
TUESDAY, MARCH 8, 2011

Rubber slumped to the lowest level in almost two months after data showed car sales in China fell for the first time in at least 16 months, stoking concern demand for tires may weaken in the world’s largest auto market.
The August-delivery contract lost as much as 4.2 percent to 437 yen a kilogram ($5,311 a metric ton), the lowest level since Jan. 11, before trading at 437.4 yen on the Tokyo Commodity Exchange at 12:11 p.m.
Sales of passenger cars and minivans declined 0.4 percent from a year earlier to 880,027 last month, the China Passenger Car Association said yesterday (Mar 7). Sales dropped for the first time since at least September 2009 after fuel prices rose and the government ended incentives supporting vehicle sales.
“The sales decline raised concerns that rubber demand may slow,” Kazunori Kokubo, general manager at Tokyo-based broker Yutaka Shoji Co., said today (Mar 8) by phone.
Rubber surged to a record 535.7 yen Feb. 18 on speculation supply will fall short of demand, led by China’s vehicle sales.
Car-sales growth in China will be about 10 percent 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, according to the group.
“Chinese car sales may not grow as much as earlier expected, given rising fuel costs and the nation’s monetary tightening,” Hisaaki Tasaka, an analyst at broker ACE Koeki Co. in Tokyo, said today (Mar 8) by phone.
China raised the sales-tax rate on small cars this year to 10 percent from 7.5 percent, phased out subsidies for vehicle trade-ins in rural areas, and increased retail gasoline and diesel prices on Feb. 21. Lower taxes helped automakers including General Motors Co. and Volkswagen AG increase deliveries last year as overall vehicle sales surged 32 percent in the world’s largest auto market to a record 18.06 million.
“We believe market sentiment is changing due to rising gas prices, higher borrowing costs and overall tightening in the economy,” Scott Laprise, a Beijing-based analyst at CLSA Asia Pacific, said in a March 3 report.
Crude for April delivery traded at $104.89 a barrel in New York. Yesterday (Mar 7) the contract gained to $105.44, the highest settlement since Sept. 26, 2008, amid concern that unrest in the Middle East and North Africa may disrupt supplies.
Demonstrations have toppled leaders in Tunisia and Egypt and there have been protests in countries including Iran, Yemen and Oman. In Saudi Arabia, the biggest oil producer in the Organization of Petroleum Exporting Countries, websites have called for a nationwide “Day of Rage” on March 11 and March 20, according to Human Rights Watch.
In Shanghai, May-delivery rubber lost 2.9 percent to 37,540 yuan ($5,716) a ton. The physical price of Thai rubber dropped 1.1 percent to 181 baht ($5.94) a kilogram yesterday (Mar 7) as Chinese buyers have delayed purchases, waiting for prices to fall further, according to the Rubber Research Institute of Thailand. The price reached a record 198.30 baht on Feb. 21.
(Bloomberg, March 8, 2011)



Tokyo Futures Fall 3 Pct On Weaker Oil, Physical Prices
TUESDAY, MARCH 8, 2011

Tokyo Commodity Exchange rubber contract for August delivery fell as much as 14.1 yen or 3.1 percent to 442.1 yen per kg, the lowest since Jan. 12.
The benchmark contract touched an all-time high around 535 yen in February.
The most active Shanghai rubber futures for May delivery ended on Monday (Mar 7) at 38,675 yuan a tonne, up from Friday's (Mar 4) close of 38,030 yuan.
Asian physical rubber prices dropped on Monday (Mar 7) as Tokyo futures extended losses after a recent rally to all-time highs.
U.S. crude futures for April delivery fell on Tuesday (Mar 8) after settling at the highest close since September 2008 at $105.44 a barrel the day before.
The euro struggled to make much headway early in Asia on Tuesday (Mar 8) after its rally stalled just above $1.40 overnight, helping an oversold dollar edge off four-month lows against a basket of major currencies.
(Reuters, March 8, 2011)



Natural rubber prices slip in domestic market
TUESDAY, MARCH 8, 2011

Natural rubber prices here today fell by Rs 3 to Rs 227 per kg on the back of declining rates in the international markets.
The rate of this commodity in the domestic market was Rs 230 per kg on March 5, according to the rubber board data.
"The prices of NR (Natural Rubber) have fallen in the major international physical markets like Malaysia, which affected prices here," Indian Rubber Dealers Association President George Valy said.
Natural Rubber in the international physical market at Bangkok was being sold today at Rs 267.53 per kg as against Rs 270.10 per kg on March 4.
Valy added that China also was buying less rubber due to fears of more unrest in Libya, which could affect crude prices further and may affect automobile sales.
Besides, he said, "The farmers are also bringing some produce in the markets, which too had partially affected the prices."



Tokyo rubber futures hit six-week low
TUESDAY, MARCH 8, 2011


Singapore (march 08, 2011) : tokyo rubber futures fell more than 3 percent to their weakest in almost six weeks on monday, as equities dropped on fears that more turmoil in the middle east and soaring oil prices could weigh on the global economy. the most active tokyo rubber contract, august 2011, fell as low as 451.3 yen a kg, its weakest since jan 26, before settling at 456.2 yen, down 12.2 yen from friday's settlement. the contract touched an all-time high around 535 yen in february.
shanghai rubber futures shrugged off declines in tocom. the most active may contract ended at 38,675 yuan a tonne, up from friday's close of 38,030 yuan. the physical market lacked activity, with main consumer china waiting for more declines in the price of tyre grade. "we don't see any offers today, but there were deals on friday at $5.01 and $5.03 a kg," said a dealer in indonesia's main growing island of sumatra.
"we are hoping that china will come back to buy, but of course we won't know when." from booming car sales in china and strong demand from european and us tyre-makers to bad weather crimping supply, the rubber market shows little sign of losing its bounce, with prices set to stay around record levels for months to come.



Spot rubber turns weak
TUESDAY, MARCH 8, 2011

KOTTAYAM, MARCH 7:
Rubber prices turned weak on Monday. The market lost ground following the dip in domestic and international futures and Bangkok spot prices. According to sources, selling from dealers was visible in most of the counters as buyers stayed back letting the prices to seek further lows. Major consuming industries remained inactive but certain tyre companies seemed to be active in sheet rubber but they kept the volumes low.
Sheet rubber moved down to Rs 226 (230) a kg according to traders. The grade closed weak at Rs 227 (230) a kg both at Kottayam and Kochi as per Rubber Board.
The March series surrendered to Rs 222 (225.74), April to Rs 229.20 (233.53), May to Rs 233.09 (237.46), June to Rs 235 (239.71) and July to Rs 235.44 (239.92) a kg for RSS 4 on the National Multi Commodity Exchange.
RSS 3 (spot) weakened to Rs 267.53 (270.10) a kg at Bangkok. The March futures for the grade declined to ¥491.9 (Rs 269.93) from ¥501.5 during the day session and then to ¥485 (Rs 266.15) a kg in the night session on the Tokyo Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 226 (230); RSS-5: 224 (228); ungraded: 223 (225); ISNR 20: 226 (229) and latex 60 per cent: 135 (137).



Natural rubber prices slip in domestic market
TUESDAY, MARCH 8, 2011

Natural rubber prices here today fell by Rs 3 to Rs 227 per kg on the back of declining rates in the international markets.
The rate of this commodity in the domestic market was Rs 230 per kg on March 5, according to the rubber board data.
"The prices of NR (Natural Rubber) have fallen in the major international physical markets like Malaysia, which affected prices here," Indian Rubber Dealers Association President George Valy said.
Natural Rubber in the international physical market at Bangkok was being sold today at Rs 267.53 per kg as against Rs 270.10 per kg on March 4.
Valy added that China also was buying less rubber due to fears of more unrest in Libya, which could affect crude prices further and may affect automobile sales.
Besides, he said, "The farmers are also bringing some produce in the markets, which too had partially affected the prices."



North-east to be rubber producing hub
TUESDAY, MARCH 8, 2011

GUWAHATI: Farmers in the North East are taking to natural rubber cultivation in a big way. The seven states of the region, with 14% of the total rubber plantations in the country, together produce 38,600 tonne of rubber.
The Rubber Board has drawn up plans to make the region the next rubber-producing hub as the scope for further expansion in traditional rubber-growing states Kerala and Tamil Nadu is limited. Tripura is the second largest producer of the tree after Kerala. The Rubber Board is investing around `170 crore for the expansion of rubber cultivation during the 11th Five-Year Plan. At least 4.5 lakh hectare has been identified as suitable for the crop and around one lakh hectare has been brought under the rubber crop. By the end of the 12th Plan, an additional 60,000 hectare is likely to be brought under rubber cultivation.
There are around 88,000 farmers involved in rubber farming and most of them are tribals with holdings of one hectare and annual earnings of over `4 lakh. KG Mohanan, additional rubber production commissioner, Rubber Board, told ET, “There is a surge in the demand for rubber in both domestic and international markets. Of the land identified suitable for rubber, Assam alone has about 2 lakh hectares.” He said rubber plantations help to arrest the practice of ‘jhum’ (shifting) cultivation, which affects environment. There are 240 dealers who procure rubber from the producers. “The traders want one truck load (10 tonne) everyday. However, it is not possible to meet such volume,” market sources said.
Rubber started gaining popularity in the mid-80s in North-East when the Rubber Board launched a scheme for accelerated rubber development in the region. The scheme provided incentives, subsidies and free extension support to encourage small growers in the region to take up rubber cultivation. Presently, clones like RRIM 600, RRII 105, PB 235 and RRII 414 & 430 are popular in the region. Mohanan added, “We are trying to develop new varieties keeping in mind the humid and cold climate of the region.”