Spot rubber slips further

Spot rubber slips further


Kottayam, May 6:
Spot rubber weakened further on Friday. Sharp declines in the Japanese futures and the absence of genuine buyers in the domestic scene kept the traders under pressure during the day. Marginal recovery on the NMCE failed to strengthen the sentiments since the near month May series ruled below the prevailing price in the physical market.

Sheet rubber moved down to Rs 226.50 (227.50) a kg according to traders. The grade dropped to Rs 227 (230) a kg both at Kottayam and Kochi as per Rubber Board.

In futures, RSS 4 recovered partially at its May series to Rs 224.60 (221.53), June to Rs 231.60 (227.04), July to Rs 234.60 (230.30), August to Rs 233 (227.40) and September to Rs 229 (224.85) a kg for on the National Multi Commodity Exchange (NMCE).

The Key Tokyo rubber futures plunged to touch the lowest level in almost two months. “It was not only the weaker oil prices and other falling commodities that dragged TOCOM down, but also the strengthening Japanese yen that triggered stop-loss selling on rubber futures,” an analyst said.

The May futures nosedived to ¥403 (Rs 224.40) from ¥427 a kg for RSS 3 during the day session but then remained inactive in the night session on the Tokyo Commodity Exchange (TOCOM). RSS 3 (spot) closed at Rs 236.27 a kg at Bangkok. Spot rates were (Rs/kg): RSS-4: 226.50 (227.50); RSS-5: 225 (225.50); ungraded: 219 (221.50); ISNR 20: 219 (220) and latex 60 per cent: 139 (141).




Natural rubber prices dip 1.7% in a week on improved supplies
FRIDAY, MAY 6, 2011

The natural rubber (NR) mart across the globe is now in a correction mode due to increased production. Both, the domestic and international prices of the commodity have fallen in the current week owing to fresh developments in production and supply of the commodity.
The unusual rainfall in the main producing areas of Kerala has brought in a slight correction in prices as production has gathered momentum. The price of benchmark grade RSS-4 fell Rs 4 a kg compared to last week’s price. In spot trading on Thursday in Kochi market, price was Rs 233 a kg which was Rs 237.50, a week back. A month back, Kochi market quoted Rs 243, since production was low due to summer heat.
A majority of plantations had stopped tapping then and this resulted in a serious supply crunch in the local market.
The abnormal heavy rainfall has now caused a fresh start of tapping and the much higher prices forced growers to re-start tapping well in advance of monsoon.
According to ANRPC (Association of Natural Rubber Producing Countries) after two successive months of decline, China’s import turned positive this March by clocking 1.4 per cent year-to-year growth to 297,000 tonnes.
The Chinese government anticipates a sharp increase in import demand this month. However, the global market had showed signs of correction beginning from the last week of April largely on concerns about the global economy, Japanese Yen appreciation and a marginal drop in crude oil prices. Price for RSS-4 grade in Bangkok market has slipped to Rs 243 a kg as on Wednesday. A month back the market recorded Rs 258 a kg.
Market sources expect that if monsoon would be normal and arrives at the right time, local production would sharply increase, leading to further fall in prices.
The second busiest production season of natural rubber in Kerala is June-August. ANRPC estimates indicate global NR supply is expected to ease in the coming weeks as farmers resume tapping due to widespread rainfall in major producing countries like Thailand, Indonesia and Malaysia.
Total supply from the ANRPC member countries is expected to reach 651,000 tonnes in April and 753,000 tonnes in May. In March, the production stood at 580,000 tonnes only. In April-June (Q2), the total global supply is likely to increase 10.5 per cent at 2.3 million tonnes as against 2.08 million tones in the same period last year.
(Source: http://www.business-standard.com/india/news/natural-rubber-prices-dip-17-inweekimproved-supplies/434598/)




Latex Price Toppish, Says OSK
FRIDAY, MAY 6, 2011

OSK Research believes the latex price is toppish and on the high side due to heavy rain and severe floods in southern Thailand as well as weaker Japanese auto sales.
The commodity which of late is locked between RM8.61 per kg (recent low) to about RM11 per kg (all time-high)had been on an uptrend since September last year.
"This price band is attributed to a clash between two factors, namely heavy rain and severe floods in southern Thailand, resulting in a scarcity of latex supply, being offset by weaker Japanese auto sales after the devastating earthquake created an auto parts shortage that will dampen tyre demand," it said.
In a research note, it also said the risk of a potential auto parts shortage, especially in Japan would then have a negative impact on the global supply chain.
Japan is the world's second largest auto parts exporter behind Germany.
"Other than this, we believe that automakers in the other parts of Asia may also face the same risk as nearly half of all Japanese auto parts shipments are destined for China and other Asian nations," OSK explained.
As such, the research house viewed the demand for rubber, to drop significantly.
Top Glove, Supermax and Kossan remained as OSK's top pick of the industry players as these companies would be the main beneficiaries when latex price eases, since they have a higher natural rubber glove mix.
Besides that, the three companies would also benefit when latex price falls as they have the largest production capacity for medical gloves.
OSK maintained an "overweight" call for the rubber gloves industry.
(Bernama, Malaysia, May 5, 2011)