Rubber likely to rebound soon

Rubber likely to rebound soon
Written by HMH | May 30, 2011 | 0


KOCHI: Natural rubber prices have seen a steep decline in the past few weeks due to better production and rising imports. However, prices are expected to recover in the coming days as production is about to enter a lean phase with the onset of monsoon.

Spot prices of rubber saw a 11% decline in May as tyre companies decided to postpone their purchase. The tyre companies’ purchases, which accounts for 62% of the total rubber consumption, registered a 25% decline in May, market sources said.

The domestic production of rubber was higher by almost 6% in April. Rubber growers and dealers are of the view that a similar trend would hold good for May also. Production was higher by almost 4% in 2010-11. “Widespread rain guarding of trees and change in import duty structure from 20% to Rs 20 or 20%, whichever is lower, has also contributed to the price fall,” said George Valy, president of Indian Rubber Dealers’ Federation. The import of rubber by the industry stood at 16,668 tonne between April and May 27. However, it is around 35% lower than the imports during the same period of the previous year. The industry is likely to bring in more rubber in the coming days, sources said.

Market analysts are of the view that the prices will bounce back once production enters a lean period during the monsoon. The earlier-than-expected arrival of monsoon showers over the Kerala coast might revive prices as production is expected to see a decline. The prices have already seen a slight increase from Rs 215 per kg on May 28 to Rs 218 on Monday.

In the international market, the prices have been witnessing a fall in the first half of the current month from Rs 245.80 per kg to Rs 230.63. However, by Monday, it recovered slightly to Rs 233.50. Market analysts project further recovery of prices in the international market due to a slowdown in field operations on account of rains. Market sources cite one more reason for the recovery in prices — the tyre companies, which stayed away from the market in May, have to come back for purchases.





Rubber advances on speculation of jump in demand by Beijing
Written by HMH | May 30, 2011 | 0


Tokyo: Rubber gained after data showed supplies in China declined to the lowest level in eight years, stoking speculation the world’s biggest consumer may step up purchases to replenish stockpiles.

November-delivery rubber advanced as much as 1 per cent to 390.9 yen a kg before trading at 388 yen on the Tokyo Commodity Exchange at 11:08am. The most active contract extended last week’s 2.4 per cent advance.

Natural-rubber stockpiles monitored by the Shanghai Futures Exchange fell 3,655 tonnes to 10,291 tonnes, the lowest level since January 2003, the bourse said on May 27. The volume decreased as shipments from Southeast Asian countries declined because of the low-production period from February to May, said Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo.

“Supply remains tight as rain disrupted tapping in Thailand, supporting cash-rubber prices,” Saito said by phone. “Chinese importers, which had delayed purchases on hopes of lower prices, may resume buying.”

Harvest

Farmers in Southeast Asia began harvesting after the low production season. Output from the region’s major producers, which represent 92 per cent of global supply, may miss estimates this year as supplies from Indonesia and Philippines slow, according to the Association of Natural Rubber Producing Countries.

Production may expand 4.9 per cent to 9.94 million tons this year, less than the 5.8 per cent gain forecast last month, the group said in an e-mailed report May 26. Output may increase 5.8 per cent in the second quarter, lower than the 10.5 per cent estimated last month, the group said. Supply jumped 10.1 per cent in the first three months of the year. Import demand is expected to expand in China and Malaysia in the second quarter, although it may decline in India, the group said.

The price of Thai rubber remained unchanged at 156.30 baht (Dh19) a kg on May 27, according to the Rubber Research Institute of Thailand. Gains in rubber futures were limited amid concern that European governments will struggle to resolve the sovereign-debt crisis, damping demand for riskier assets, Saito said.

The euro weakened after Greek Prime Minister George Papandreou said he’ll press ahead with new austerity measures even as he failed to win backing from opposition parties.







Despite tight Rubber supply, prices unlikely to rise
Written by HMH | May 30, 2011 | 0


COCHIN (Commodity Online): Rubber market is expected to remain firm in the wake of unexpected rains in major rubber producing regions including that of India.

Malaysian market will also experience short supply. But prices are unlikely to have a steep rise as China’s demand is not expected to rise. On the contrary, dealers say, the demand may come down thereby offsetting the supply deficit.

However, consumers like tyre manufacturers may face shortage in the long run. India’s tyre manufacturer, Appollo Tyres, in fact is toying with the idea of buying rubber plantations to fight surging rubber prices.






NR prices drift upwards
Written by HMH | May 30, 2011 | 0



Tokyo — Prices on Tokyo’s rubber exchanges rose marginally over the weekendt.

On Tokyo’s Tocom Exchange, prices for the six-month contract rose by about yen 1, trading at yen 389 ($4.81) per kg on Monday 30 May. Shorter-dated prices moved down, trading at around 410.

In Singapore, SGX said short-dated RSS3 were trading up $0.03 at around $5.17 with longer-dated contracts down slightly at around $4.97. Short-dated TSR 20 was trading up $0.02 at $4.66.

In India, the NMCE saw June deliveries rise by a fraction of a rupee to close at around Rs217 ($4.81) per kilo

In China, the Shanghai Futures Exchange also saw prices ease by a fraction of a yuan, with June deliveries trading at around Yuan 34.9 ($5.38) per kilo.





India: Spot rubber improves on covering buys
Written by HMH | May 29, 2011



KOTTAYAM, MAY 29:
The domestic rubber prices finished better on Saturday. In spot, the market recovered partially on covering purchases at lower levels in tune with the gains on NMCE.

Sheet rubber improved to Rs 215.00 (214.00) a kg according to traders. The trend was mixed as ungraded rubber and ISNR 20 remained flat and comparatively inactive.

The volumes were dull.

In futures, the June series improved to Rs 217.16 (215.08), July to Rs 221.50 (219.04), August to Rs 221.06 (218.72), September to Rs 219.30 (218.00), October to Rs 217.49 (215.55) and November to Rs 219.40 (217.15 ) per kg for RSS 4 on National Multi Commodity Exchange (NMCE). The spot rubber rates per kg (in Rs): RSS-4: 215.00 (214.00), RSS-5: 213.00 (212.00), Ungraded: 210.00 (210.00), ISNR 20: 207.00 (207.00), and Latex 60 per cent: 128 .00 (128 .00).





A Daily report on Natural Rubber: May 30, 2011
Written by HMH | May 30, 2011



Natural rubber prices in the domestic market are hovering near a two month low. Priceshave been falling broadly in the domestic market owing to higher production in Indiaduring last few months, favorable weather etc. Arrival of South West monsoons mayprovide support to the falling prices as heavy rains may hinder tapping and therebyarrivals to the market. Monsoon rains in southern parts of Thailand have affects suppliesto the market. Natural rubber prices in the international market may firm up in comingdays on limited supplies. ANRPC have revised down its production forecasts for 2011 aswell as for the second quarter of 2011. Meanwhile, stocks in China, largest rubberconsumer, have also been dwindling. Rubber inventories in warehouse monitored by SHFEdeclined 26.21 per cent last week, to their lowest in eight years. SHFE will raise marginrequirements for all its forward contracts from June 02 settlement in order to curbvolatility ahead of the Dragon Boat Festival.