Rubber-based industry slowing down

Rubber-based industry slowing down
TUESDAY, MAY 10, 2011

BANGKOK, 9 May 2011 – Over 30,000 workers in the rubber-based industry have been affected by the twin disasters in Japan as car tyre factories are reducing production capacity, according to the Federation of Thai Industries (FTI).
FTI Rubber Based Industry Club President Dr Chayo Trangadisaikul stated that 15 domestic car tyre manufacturers have reduced production capacity by 30-40% and cut overtime (OT) operations; thereby, over 30,000 workers in the industry are affected.
Car tyre production is slowing down after the auto industry has reduced vehicle production by 150,000 units in the second quarter this year since car factories are lacking supplies of auto parts from Japan which was struck by a massive earthquake and a deadly tsunami in March.
Dr Chayo further reported that the rubber-based industry hence could shrink by about 20% and lose approximately 900 million baht in revenue in the second quarter. He admitted that damages would be higher if the auto industry in Thailand could not resume production in the third quarter this year.
The president expected that the value of the rubber-based industry for the whole year would be around 100 billion baht, down from the value last year of 120-130 billion baht. According to him, the stagnant auto industry is tentatively the major factor of the fall since it accounts for 60% of the rubber-based industrial outputs.
Dr Chayo suggested that entrepreneurs should export para rubber and car tyre materials to other countries such as Russia, China, Brazil and India where para rubber demands are high, as well as to other ASEAN countries such as Indonesia, the Philippines, Vietnam and Myanmar.




Tyre units seek duty-free import of 2 L. tonnes NR
TUESDAY, MAY 10, 2011
KOCHI, MAY 10:
Projecting a 1,89,000-tonne deficit in production of natural rubber during 2011-12, the tyre industry has asked the Government to bridge the gap by allowing duty-free import of 200,000 tonnes.
In the last four financial years, the production has increased by only 1 per cent, while consumption has increased by over 15 per cent, the All-India Tyre Manufacturers Association (ATMA) Director-General, Mr Rajiv Budhraja, told reporters here today.
During the current fiscal, domestic consumption is likely to lag behind production by 189,000 tonnes.
New capacities and major expansions undertaken by tyre companies to cater to the booming automobile industry will lead to an increase in consumption by 15,000 tonnes, he said.
The Rubber Board has projected an increase in consumption by only 40,000 tonnes during the current financial year and the gap between domestic production and consumption has been projected at 75,000 tonnes.
The “conservative consumption estimates by the board might impact the desired policy making for rubber sector”, he said.
AITMA and the All-India Rubber Industries Association (AIRIA) also made presentations before the Rubber Board at Kottayam, stating that taking a cue from China, urgent policy interventions are imperative to ensure timely and competitively priced availability of natural rubber to user industries.
In view of the widening gap between natural rubber supply and demand, coupled with growth in tyre demand, a rise in volume of imports of finished products is likely in light of the constraints to domestic production.
As a result, value addition of natural rubber to produce finished products, particularly tyres, will take place outside the country, especially in China, which has ensured adequate and timely availability of natural rubber to its industry through timely interventions, including acquisition of land outside the country, he said.
The AIRIA President, Mr Vinod Simon, said with the growing deficit between production and consumption, rubber imports were inevitable, failing which the import of finished products will take place, denying the opportunity of value addition within the country.
Domestic natural rubber deficit and expensive imports have been inhibiting the “full blossoming” of the industry in the country, he added.




Natural rubber deficit projected at 1,89,000 tonnes
TUESDAY, MAY 10, 2011

Kochi, May 10 (PTI) Projecting a 1,89,000-tonne deficit in production of natural rubber in the country during 2011-12, the tyre industry today asked the government to bridge the gap by allowing the duty-free import of 200,000 tonnes.
In the last four financial years, natural rubber production has increased by only 1 per cent, while consumption has increased by over 15 per cent, All-India Tyre Manufacturers Association (ATMA) Director General Rajiv Budhraja told reporters here.
In the current fiscal, domestic consumption is likely to lag behind production by 189,000 tonnes.
New capacities and major expansions undertaken by tyre companies to cater to the booming automobile industry will lead to an increase in consumption by 15,000 tonnes, he said.
The Rubber Board has projected an increase in consumption by only 40,000 tonnes during the current financial year and the gap between domestic production and consumption has been projected at 75,000 tonnes.
The "conservative consumption estimates by the board might impact the desired policy making for rubber sector", he said.
AITMA and the All-India Rubber Industries Association (AIRIA) also made presentations before the Rubber Board at Kottayam, stating that taking a cue from China, urgent policy interventions are imperative to ensure timely and competitively priced availability of natural rubber to user industries.
In view of the widening gap between natural rubber supply and demand, coupled with growth in tyre demand, a rise in volume of imports of finished products is likely in light of the constraints to domestic production.
As a result, value addition of natural rubber to produce finished products, particularly tyres, will take place outside the country, especially in China, which has ensured adequate and timely availability of natural rubber to its industry through timely interventions, including acquisition of land outside the country, he said.
AIRIA President Vinod Simon said with the growing deficit between production and consumption, rubber imports were inevitable, failing which the import of finished products will take place, denying the opportunity of value addition within the country.
The domestic natural rubber deficit and expensive imports have been inhibiting the "full blossoming" of the rubber industry in the country, he added.




Tokyo rubber futures up
TUESDAY, MAY 10, 2011

Tokyo (may 10, 2011) : key tokyo rubber futures inched higher on monday as sentiment improved with stabilising commodity markets, and investors found price levels attractive after a sell-off late last week. the benchmark tocomrubber futures for october delivery was up 1.4 yen, or 0.4 percent, at 362.5 yen per kg as of 0009 gmt.
tokyo rubber futures dropped 6.6 percent on friday on heavy stop-loss selling, triggered by a strengthening japanese yen and weaker oil prices, while a broad sell-off in other commodities added to the downward pressure on prices, dealers said. on friday, the october contract fell as much as 8 percent to an intra-day low of 353.2 yen, its lowest since march 16.
the most active shanghai rubber futures contract for september delivery was down 90 yuan to settle at 30,290 yuan ($4,664.660) per tonne on friday. honda motor co said it has decided to market its civic gx natural-gas-powered car in the united states, starting this fall, the nikkei business daily said.
japan's crude rubber inventories inched down 8 tonnes in the 10 days to april 20, rubber trade association of japan data showed on friday. rubber inventories in warehouses monitored by the shanghai futures exchange fell 8.4 percent last week, the exchange said.




SICOM Futures To Move To SGX Next Week
TUESDAY, MAY 10, 2011

Singapore Exchange said its derivative market will from 16 May add rubber futures to its commodities suite with the migration of SICOM rubber contracts onto the SGX trading platform.
SGX said, "The addition of SICOM TSR 20 and SICOM RSS 3 rubber futures will enable more international traders to participate in the contracts, thereby enhancing liquidity." The rubber contracts have a history which dates back to the 1920s and are pricing benchmarks for regional and global rubber producers, manufacturers, traders and consumers. From 16 May, TSR 20 rubber contracts traded over-the-counter will also be cleared by SGX AsiaClear.
Mr Gan Seow Ann, president of SGX said, “By bringing together all our commodities futures on our derivatives market, SGX strengthens its commitment to deliver Asia with Global Reach. Our customers will benefit from more opportunities to trade and manage their risk exposures in the region.”
(European Rubber Journal, May 9, 2011)




Tyre Firms in India Plan To Raise Prices
TUESDAY, MAY 10, 2011

Tyre companies in India are planning one more raise in prices, from next month, to cover the rising cost of rubber, a key raw material.
“Tyre companies have raised their prices in the past to deal with high rubber prices, but it still does not cover the total cost of production,” said Rajiv Budharaja, director general of the Automotive Tyre Manufacturers’ Association, the apex body.
Natural rubber prices on the spot market in India had touched a high of Rs 242 per kg this year, 40 per cent higher from a year before. These have since moderated to Rs 228 a kg, on increasing arrivals of the new crop. More softening is expected on increased arrival. Ceat had increased prices by five per cent in April and is planning a further one in May, by another four to five per cent. “It is inevitable,” said Arnab Banerjee, executive director, operations. “Consumers might not be able to accept full cost but a certain amount of price hike is necessary.”
MRF says its raw material costs have risen by 51 per cent over the past year. As a result, its profits declined to Rs 898 million from Rs 958 million, a fall of six per cent. Ceat’s raw material costs have gone up by 55 per cent. It has reported a net loss of Rs 179 million compared to a net profit of Rs 215 million a year before.
(Sify Finance, India, May 10, 2011)




NR Prices In Up-And-Down Movements
TUESDAY, MAY 10, 2011

Prices on Tokyo’s rubber exchanges moved sharply upward over the weekend, though forecasters say prices are likely to drop further this week.
On Tokyo's Tocom Exchange, prices for the six-month contract closed up by yen 14 at yen 373 ($4.62) per kg on Monday 9 May. Shorter-dated prices were higher, at around yen 410.
In Singapore, Sicom said short-dated RSS3 closed down by some $0.12 at around $5.10 with longer-dated contracts trading at around $4.65. Short-dated TSR 20 closed down by $0.10 at $4.34
Prices on India's NMCE exchange closed up Rs 6 at Rs 227 ($5.08 per kilo).
In China, the Shanghai Futures Exchange saw prices recover by about half a yuan, with May deliveries trading at around Yuan 34.7 ($5.34) per kilo
(European Rubber Journal, May 9, 2011)




Rubber prices may stabilize next few weeks - CRTA
TUESDAY, MAY 10, 2011

The recent tumble of rubber prices, both in international and domestic markets are expected to pick up at least by the end of May, said Vice Chairman of Colombo Rubber Traders’ Association (CRTA) and Managing Director of Kegalle Plantations PLC, Sunil Poholiyadde.
“The reason for the slight dip in prices has been the falling rubber prices in the global market, especially those supplied by Thailand which represents 30%-40% of natural rubber requirement.”
He pointed out that commodity prices as a whole have come down due to the unfavorable weather conditions in the country as well as global events taking place. The recent natural disasters also affected main buyer Japan.
“We are heading towards the south-western monsoon, where tapping will end. However, we don’t expect to see a drastic drop in prices,” Poholiyadde added. He mentioned that the present supply cannot meet both local and international market demands, due to low production capacities in Thailand.
Damitha Fernando of Forbes and Walker said that prices were overdone in the market in the recent past. “Due to continuous rains, production has been quite low, but now the prices are stabilizing gradually,” he added. “We can expect the prices to come down to between Rs. 475-500 as long as there is no extensive damage to the crops.”




Malaysian Rubber Players May Opt To Stay Sidelined
TUESDAY, MAY 10, 2011

Prices on the Malaysian rubber market are expected to trade soft next week on lack demand due the current higher prices, dealers said.
They said the prices are expected to decline between eight and 10 per cent lower on the back of weak demand for the commodity.
"Most players may opt to delay fresh purchases and remain sidelined until prices begin to fall," a dealer said.
On a week-to-week basis, the Malaysian Rubber board (MRB) official physical price for tyre grade SMR 20, decreased 59.0 sen to 1,304.5 sen per kg from the 1,363.5 sen per kg last Friday (May 6).
Latex in bulk fell 30.0 sen to settle at 956.0 sen per kg from 985.0 sen per kg previously.
The unofficial closing price for SMR 20 lost 73.0 sen to 1,292.0 sen per kg from 1,365.0 sen per kg last Friday (May 6) and latex-in-bulk shed 30.0 sen to 951.0 sen per kg from 982.0 sen per kg previously.
(Business Times, Malaysia, May 7, 2011)




Asian physical rubber underpressure
TUESDAY, MAY 10, 2011

Singapore (may 08, 2011) : a few cargoes of tyre grade rubber changed hands for nearby shipments, but the physical market was under pressure from a lack of demand from main consumer china despite falling inventories there, dealers said on wednesday. rubber inventories monitored by the shanghai futures exchange stood at 5,065 tonnes as of last week, the lowest in at least two years.
prices of tyre grade have tumbled since hitting a record on february after a devastating earthquake in japan hit auto production, and china tightened the economy - triggering heavy selling in tokyo and shanghai rubber futures. thai rss3, often seen as benchmark in the physical market, was traded late on tuesday at $5.30 a kg for june shipment, far below a record of $6.40 quoted in february. indonesia and malaysian grades changed hands below $5 a kg.
"china consumers realise the market is being kept down and are just buying hand to mouth," said a dealer in singapore, who mainly trades indonesian grade. the most active contract on shanghai rubber futures, september 2011 ended at 31,145 yuan a tonne on wednesday, down from tuesday's closing of 31,760 yuan on worries about more measures from china to fight inflation. tokyo rubber futures, which set the tone for physical prices, were closed for a holiday.
the official china securities journal cited central bank vice governor yi gang as saying that china would keep mopping up excess cash in the economy by raising cash reserve requirements for banks, adding that measures taken dampen prices would show results in the second half of the year. "the physical consumption has been falling month on month china's economic growth in the second quarter will definitely slow down," said guo cheng, an analyst with yong'an futures.
dealers said tyre makers such as bridgestone were still in the market, while china's lack of interest showed that local tyre makers turned to rely on inventories in qingdao bonded area, which are not disclosed to the public, but make up the bulk of the country's rubber stocks.
(Source: http://www.brecorder.com/news/agriculture-and-allied/world/1186308:asian-physical-rubber-underpressure.html?hl=rubber)






Rubber to trade soft this week
TUESDAY, MAY 10, 2011

KUALA LUMPUR: Prices on the Malaysian rubber market are expected to trade soft this week on lack demand due the current higher prices, dealers said.
They said the prices are expected to decline between eight and 10% lower on the back of weak demand for the commodity.
“Most players may opt to delay fresh purchases and remain sidelined until prices begin to fall,” a dealer said.
On a week-to-week basis, the Malaysian Rubber board (MRB) official physical price for tyre grade SMR 20, decreased 59.0 sen to 1,304.5 sen per kg from the 1,363.5 sen per kg previous Friday. Latex in bulk fell 30.0 sen to settle at 956.0 sen per kg from 985.0 sen per kg previously.
The unofficial closing price for SMR 20 lost 73.0 sen to 1,292.0 sen per kg from 1,365.0 sen per kg previous Friday and latex-in-bulk shed 30.0 sen to 951.0 sen per kg from 982.0 sen per kg previously. Bernama




China continues anti-dumping measures against imported chloroprene rubber
TUESDAY, MAY 10, 2011

BEIJING, May 9 (Xinhua)-- The Chinese Ministry of Commerce (MOC) announced on Monday that it will continue to impose anti-dumping measures on chloroprene rubber imported from Japan, the United States and the European Union for another five years.
The extended anti-dumping measures will take effect beginning Tuesday with a term of five years, according to a statement on the MOC's web.
The decision came after a 12-month investigation by the MOC to review measures it had imposed in 2005.
China's domestic chloroprene rubber producers filed an application for a re-examination of the anti-dumping measures against Japanese, U.S and EU rubber exporters in March of last year.
During the investigation that began on May 9, 2010, the MOC found that dumping by Japan, the U.S. and the EU would be very likely to continue if the anti-dumping measures came to an end, which would damage China's chloroprene rubber industry, according to the statement.
In May 2005 the MOC imposed anti-dumping duties ranging from 2 percent to 151 percent on imported chloroprene rubber from Japan, the U.S. and the EU with a term of 5 years.
Chloroprene rubber, commonly known as Neoprene, is mostly used in manufacturing electrical cables and other types of cables, as well as water-proof products.