Spot rubber dips on panic selling...June 22: NR prices sink further in Tokyo

Spot rubber dips on panic selling


KOTTAYAM, JUNE 22:
Domestic rubber prices lost heavily on Wednesday. In the spot, prices fell on panic selling by dealers, following sharp declines in domestic and international futures. According to sources, there was no visible improvement in arrivals as growers were still not prepared to sell their stocks since they expected better quotes during the ongoing low production season. Along with this, the absence of quantity buyers kept the market under pressure and it sought lower levels amidst comparatively dull volumes.

Sheet rubber declined to Rs 217.50 (222.50) a kg, as quoted by the traders. The grade surrendered to Rs 218.00 (222.50) a kg both at Kottayam and Kochi, according to the Rubber Board.

The July series weakened to Rs 212.65 (219.90), August to Rs 215.84 (221.77), September to Rs 215.15 (220.01) and October to Rs 214.50 (220.00) a kg for RSS 4 on the National Multi Commodity Exchange.

RSS 3 (spot) closed at Rs 221.73 (226.06) a kg at Bangkok. Its June futures dropped to ¥ 393.0 (Rs 219.79) from ¥ 400.7 a kg during the day session but then remained inactive in the night session on Tokyo Commodity Exchange.

The spot rubber rates (Rs/kg) were: RSS-4: 217.50 (222.50); RSS-5: 215 (220); Ungraded: 213 (218); ISNR 20: 215 (219) and Latex 60%: 137 (139).







June 22: NR prices sink further in Tokyo
June 22, 2011

Tokyo’s Tocom Exchange, prices for the six-month contract moved down by yen 16 overnight, to close at yen 362 ($4.51) per kg on Wednesday 22 June. Shorter-dated prices moved down sharply, trading at around yen 385.

In Singapore, SGX said September RSS3 was around $0.13 lower than Tuesday’s prices at around $4.75 on thin trading with contracts for January 2012 trading at around $4.53. Short-dated TSR 20 was trading down by about $0.15 at $4.43.

In India, the NMCE saw July deliveries unchanged at around Rs220 ($4.90) per kilo

In China, the Shanghai Futures Exchange also saw prices fall by half a yuan, with June deliveries trading at around Yuan 34.1 ($5.27) per kilo.





Tokyo Futures Weaker on Growth Concerns
June 22, 2011




Key Tokyo rubber futures eased on Wednesday (June 22) on an uncertain U.S. economic outlook and debt problems in the euro zone, which have fuelled concerns about demand, but losses were expected to be limited due to the lack of a strong selling factor.

FUNDAMENTALS

The benchmark rubber contract on the Tokyo Commodity Exchange for November delivery inched down 0.5 yen or 0.1 percent to 377.1 yen per kg as of 0007 GMT.

The most active Shanghai rubber contract for September delivery closed on Tuesday (June 21) at 33,310 yuan ($5,146.062) per tonne, compared with 33,290 yuan on Monday (June 20).

Oil fell in early Asia on Wednesday (June 22), after prices fell the day before on concerns about the euro zone.

The euro ran into profit-taking in Asia on Wednesday (June 22) after the Greek government won a vote of confidence in a widely expected outcome, but further losses may be limited as the market’s focus turns to the Federal Reserve.

MARKET NEWS

Greece’s embattled government survived a confidence vote on Wednesday (June 22) that was crucial to avoiding a sovereign default, as thousands of protesters chanted insults outside parliament.

Sales of previously owned U.S. homes hit a six-month low in May and supply rose, pointing to a housing market still struggling to regain its footing.

Germany’s Daimler warned of growing economic risks in emerging markets such as China that could cause the auto industry’s growth engine to sputter.

Natural rubber prices in India are likely to decline this week, tracking bearish global cues and reduced demand locally though falling supplies due to rains are seen restricting the losses, dealers said on Tuesday (June 21).

The Nikkei stock average gained for a third straight session, tracking an advance on Wall Street after Greece’s government on Wednesday (June 22) survived a confidence vote crucial to avoiding a sovereign default.

U.S. stocks posted gains for the fourth day on Tuesday (June 21) on growing hopes that Greece will avoid a debt default, adding momentum to the market’s recent rebound.







Crude oil prices fall again
June 22, 2011


Brent crude fell today, dragged down by the sell off in the spread to US crude and a warning about risks to Spain’s economy that added to concerns about the euro zone.

A sell off in the spread between Brent crude and US oil futures narrowed the London grade’s premium to below $US17 a barrel for the first time since June 9 as West Texas Intermediate staged a late session rally to end higher.

Crude prices had turned negative just before noon in New York trading.

The move picked up momentum after the International Monetary Fund warned that Spain faces considerable risks to economic recovery and must deepen and conclude reform work to allay market concerns.

“Crude futures fell back on the news of the IMF warning that the repair of Spain’s economy is incomplete and that risks are still considerable,” said Phil Flynn, analyst for PFGBest Research in Chicago.

“People are also concerned that the confidence vote on the Greek government later today won’t go as smoothly as earlier thought.”

Prices had risen in early trade, with gains pegged to the weakening in the dollar as investors grew more optimistic that Prime Minister George Papandreou’s cabinet would survive a confidence vote.

Brent August crude tumbled 74 cents to $US110.95 a barrel, off earlier highs of $US113.10 a barrel and marking the lowest settlement since May 23.

US crude for July delivery, which expired today, rose 14 cents to settle at $US93.40.

The more heavily traded August contract rose 54 cents to settle at $US94.17 a barrel, then turned negative after the release of US inventory data from the American Petroleum Institute.

“The market is obviously nervous and is trying to sort out macro economic issues like the confidence vote in Greece. Asset classes, across the board, are trying to sort their next direction,” said John Kilduff, partner at Again Capital LLC.

Late today, the Greek government survived the confidence vote. After that news, the US August crude contract fell to $US93.50, down 67 cents from Tuesday’s settlement, as traders took profits on the news.

The euro rose slightly on the Greek vote, but its gains faded with traders citing fear that next week, the Greek parliament may vote down a package of unpopular reforms.

In the day’s earlier trade, Brent crude reversed after failing to match Monday’s intra-day high and hitting resistance at the 50% Fibonacci retracement point of the price gains achieved between May and June.

US trading volumes were light, about 32% below the 30-day average just after the settlement at 493,000 lots. Brent traded a similar volume – 484,000 lots – about average for the 30-day period.

Analysts said that while crude oil prices remain high, the specter of weak demand and economic concerns have raised concerns among traders, with Brent crude falling for three straight sessions.

“This is one of those markets where there is not a lot supporting it,” said Peter Beutel, president of Cameron Hanover, trading consultants in New Canaan, Connecticut.

“At any given moment it can start dropping because there is no fundamental support, the demand numbers are not strong – these are the kinds of numbers you seen in a recession, not an expansion.”

Inventory data weighs

US crude for August had turned negative in late, post-settlement trade, following a smaller-than-expected draw in crude oil stocks last week, according to the API data.

Crude oil stocks fell by a small 81,000 barrels last week as refinery utilization rose, compared with analysts’ expectations of a 1.4 million barrel decline.

Inventories at the key US futures delivery hub of Cushing, Oklahoma, rose by 857,000 barrels on the week, API said.

Oil product stocks unexpectedly fell, with gasoline inventories off 1.5 million barrels even as refinery utilization rates climbed 2% percentage points to 86.5% of capacity.







Tokyo Futures in Range; Weak Shanghai, Supply Weigh
June 22, 2011


Key Tokyo rubber futures were little changed on Tuesday (June 21), caught in narrow ranges as a weak Shanghai rubber market and rising supplies weighed on sentiment while investors lacked incentives to sell actively.
The benchmark rubber contract on the Tokyo Commodity Exchange for November delivery settled at 377.6 yen per kg, nearly flat from Monday’s (June 20) settlement of 377.9 yen.
The most active Shanghai rubber contract for September delivery was also nearly flat, closing on Tuesday (June 21) at 33,310 yuan ($5,146.062) per tonne, compared with 33,290 yuan on Monday (June 20). It earlier fell as much as 1.6 percent on Tuesday (June 21).
Asian physical rubber prices were steady on Tuesday (June 21) despite the prospect of rising supply in major producing countries as firm futures prices on the Tokyo Commodity Exchange provided support, dealers said.
Tokyo stocks rose 1 percent for their biggest daily gain in three weeks on Tuesday (June 21), led by auto stocks climbing on bullish comments from a brokerage but volume was thin and most players were on the sidelines ahead of a Federal Reserve policy meeting.
Concerns about global economic outlook and sovereign debt crisis in the euro zone have recently dampened investor sentiment, putting a cap on TOCOM rubber prices.
High crude prices may derail growth in China and India, the two nations that have helped the global economy overcome the financial crisis, the International Energy Agency said.
ICE Brent crude futures rose more than $1 on Tuesday (June 21) as some investors tried to take advantage of the recent fall in crude prices.
The euro clung to small gains on Tuesday (June 21) as market players bet the euro zone will cobble together measures to prevent Greece from defaulting on its debt, though its advance could stall ahead of a confidence vote on the government in the Greek parliament.






Traders, packers promise to limit ‘doping' in rubber

KOCHI, JUNE 22:
The participation in National Multi Commodity Exchange's (NMCE) rubber futures has been growing and warehousing capacity has been increased to about 30,000 tonnes so that producers and suppliers are able to stock up to the maximum capacity. Although, on an average about 12,000 tonnes of rubber were stocked at any point of time last year, the NMCE said that the average would have been higher if the storage facilities were increased.

At a meeting organised by the NMCE in association with the Forward Markets Commission in Kochi, representatives of producers assured that they would not only improve the quality but also create greater awareness among the growers and traders. Traders and packers have pledged that all doping would be done within limit, although some unscrupulous traders might have used excess doping that can now be identified with the traceability programme that the warehousing corporation and the NMCE would introduce.

DOPING

Doping is an instance where a stockist uses powder and solutions to mark his identity and the quality of the rubber on 50-kg weight of rubber sheets for future identification at the warehouses, Mr N. Radhakrishnan, Advisor to the Cochin Rubber Merchants Association, said. “There are some unscrupulous traders who use half to one kg of doping in order to increase the weight of his stocks. If at the time of delivery, the weight is found to be different, it is the warehouses and that NMCE who would be held accountable.”

The meeting was called in order address the issues of stakeholders where prominent members and senior officials of the Rubber Board, NMCE, producers, cooperative society, central warehousing corporation, rubber user industry, traders and brokers were present.

Dr S. Mohan Chandran Nair, Director of Rubber Board, stressed the need on quality and packing improvement in the case of rubber. He also dealt on how doping can be reduced. It was decided that CWC would be given sample rubber sheets which would show acceptable range of doping and those with excessive doping would be rejected.

It was also decided that awareness programmes would be conducted on doping aspect in which the NMCE and the CWC would also participate along with Rubber Board. The CWC would maintain the details of the original depositor so that excess doping suppliers could be identified and traced at any stage.

PEPPER DELIVERY CENTRE

Dr Charles Kithu, Director of Spices Board, offered to provide excellent grading and processing facility at Vandanmedu for both black pepper and cardamom. Mr Anil Mishra, Managing Director, NMCE, welcomed the move and asked members present whether Vandanmedu should be declared as additional delivery centre for black pepper.

Over and above Kochi, the NMCE said that it would declare Vandanmedu as an additional delivery centre, which would be in the interest of the farmers. The CWC has acquired good go-downs for storage at Vandanmedu and they are committed to give excellent service to both producers and users.

Warehouse receipt funding issue was also discussed with the bankers present and they have agreed to look at the increasing opportunity of almost risk free advances against warehouse receipts when it is accompanied with forwards sales note on the NMCE because the banks would have risk free lending and would get paid directly by the NMCE on production of warehouse receipts.




MRF declares lockout at Kottayam plant
Story Dated: Wednesday, June 22, 2011 15:36 hrs IST


Chennai: Leading tyre manufacturer MRF has declared a lock out at their Kottayam plant following labour unrest. In a filing to the Bombay Stock Exchange, MRF said it had declared the lock out with effect from 5 a.m., Wednesday on account of labour unrest.

Union sources said the lockout at the plant in Vadathoor was a fallout of a dispute between an employee and a supervisor over alleged unauthorised leave. The employee was not allowed to join duty on Saturday and supporting him other workers staged a 'walkout', a union office-bearer said.

The plant had not been operating for the last four days and the loss was estimated about Rs 22 crore, he said. The Kottayam plant employs about 1,350 personnel in all three shifts and manufactures tyres, tubes, he added.

MRF Tyres has seven manufacturing facilities in South India. It exports tyres and conveyor belts to over 65 nations, including US, Europe, Middle East, Japan.