Natural rubber imports set to increase on tyre demand

Natural rubber imports set to increase on tyre demand
July 15, 2011



Natural rubber imports by India, the fourth-biggest producer, may climb as much as 13% this year as rising car sales lift demand for the commodity used in tyres and gloves.

Purchases may climb to about 200,000 tonnes in the year that began on April 1 from 177,482 tonnes a year earlier, Rajiv Budhraja, director general of the Automotive Tyre Manufacturers Association, said. Imports in the three months through June rose 10% to 41,929 tonnes, the government-owned Rubber Board said in a statement on Friday. Purchases in June surged 60% to 19,118 tonnes.

Higher Indian purchases may extend a 44% rally in rubber prices in the past year in Tokyo and increase costs for Indian tyremakers including MRF and Apollo Tyres.

“International prices have declined and are now on par with domestic prices, leading to higher purchases from India,” Budhraja said. “Most tyre companies plan imports in the first half as it is the lean production season in India.”

December-delivery rubber gained as much as 1.2% to 380.6 yen a kg ($4,808 a tonnes) before settling at 378 yen at on the Tokyo Commodity Exchange. Futures have tumbled 29% since reaching a record 535.7 yen a kg reached on February 18.

Bridgestone and its Indian rivals including Apollo and MRF are investing $3 billion in plants to meet rising demand for tyres, according to the tyre manufacturers group. Car sales in the world’s second-most populous nation may more than double to 3 million by 2015, according to the government, boosting demand for rubber.

“Main demand for the tyre industry comes from the replacement market for trucks and buses. If the overall economic and the agricultural growth remain good, then the demand from this sector will receive a boost,” he said.

India’s car sales may grow 10% to 12% this financial year, the Society of Indian Automobile Manufacturers said on July 11. That’s less than the 16% to 18% it predicted earlier.

Imports will climb in July even after domestic natural rubber output gained 5.3% in the three months through June, Budhraja said. Production last month advanced 4.1% to 59,200 tonnes, according to the board.





Spot rubber rules steady
July 15, 2011



KOTTAYAM, JULY 15:
Spot rubber ended almost unchanged on Friday. The market lost its direction lacking fresh incentives either from the domestic or international front to catalyze the sentiments. ISNR-20, the only gainer of the day inched up on comparatively better demand. While supply concerns continued to lend support, increased domestic production, rise in imports and slowdown in car sales limited the gains. The transactions were low.

Sheet rubber was steady at Rs 214 a kg, according to traders. The grade improved marginally to Rs 214 (213.50) a kg both at Kottayam and Kochi, as reported by the Rubber Board.

In futures, the July series expired at Rs 213.65 (213.20) while the August series closed at Rs 215.60 (215.86), September at Rs 215.35 (215.98), October at Rs 215.60 (215), November at Rs 216.60 (216.75) and December at Rs 217.89 (218) a kg for RSS 4 on the National Multi Commodity Exchange.

RSS 3 weakened at its July futures to ¥372.9 (Rs 210.12) from ¥373.1 a kg during the day session but then recovered to ¥373.2 (Rs 210.29) in the night session on the Tokyo Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 214 (214); RSS-5: 211 (211); ungraded: 208 (208); ISNR 20: 211 (208) and latex 60 per cent: 137 (137).



Global demand, cost of rubber boosting prices of mega-tires
July 18, 2011





A spike in rubber costs, as well as increasing demand worldwide, is contributing to rising prices for large tires made by Titan Tire Corp. and other tire manufacturers.

Demand for mining tires is “just exploding,” according to Titan, which is owned by Titan International Inc. of Quincy, Ill., and operates a large tire manufacturing facility in Bryan. The company began test production in Bryan last year on 63-inch, 13,000-pound mega-tires for the mining industry, which is booming because of high demand worldwide for gold, iron ore, coal, and other minerals.

Prices for tires about 11 feet across, such as those used onCaterpillar Inc. trucks that haul iron ore and coal, have touched $100,000 on the spot market, according toLeighton Holdings Ltd., a contractor for mining companies, including BHP Billiton Ltd. and Anglo American Ltd. That compares with contract prices of about $30,000, according to Roesler Tyre Innovators GmbH, which retreads so-called off-the-road tires.

Kevin Rohlwing, senior vice president of training for the Tire Industry Association in Maryland, said that the prices of natural rubber and synthetic rubber, which is made with petroleum, have increased substantially in the last couple years.

The price of natural rubber, a main ingredient in large tires, was around $2.23 per pound Friday, compared to $1.70 a pound a year ago and 75 cents a pound in 2009.

“You’re talking about a tire with hundreds of pounds, if not thousands of pounds, of rubber,” Mr. Rohlwing said. “When your main raw material triples in cost, that’s going to filter down to the consumer.”

The price increases are being seen in other areas of the tire market. Titan Tire announced this month it plans to raise prices up to 8 percent for Goodyear-branded farm tires shipped on or after Aug. 1. Raw material, energy, and transportation costs were cited for the price hike.

International demand also has increased for mining tires around the world. Demand from China, the world’s biggest metals buyer, has driven copper, iron ore, gold, and coal to record prices this year, forcing companies to compete for the equipment and labor needed to mine them.

Mr. Rohlwing noted that the majority of industrial-sized tires are made in the United States and Japan, and exported around the world.

“With so many limited numbers of manufacturing plants, and it being such a