News on the rubber market in India:

News on the rubber market in India:
June 30, 2011




Rubber yesterday traded with the negative node and settled -0.33% down at 20903 and likely to remain weak as yielding areas in Indonesia were expected to drop by 37,000 hectares this year, while falling rubber prices could also curb supply, the Association of Natural Rubber Producing Countries (ANPRC) said. ANRPC production reached 9.47 million tonnes in 2010. Added the marginal upward revision is due to the scaling up of Indonesia’s forecast by the government to 2.95 million tonnes from 2.89 million tonnes expected until a month before.

The heavy rain that has hit top producer Thailand for weeks has stopped, allowing farmers to tap more latex, so supply is likely to rise gradually. In yesterday’s trading session Rubber has touched the low of 20875 after opening at 21050, and finally settled at 20903. For today’s session market is looking to take support at 20830, a break below could see a test of 20758 and where as resistance is now likely to be seen at 21020, a move above could see prices testing 21138.




India Certification May Bring Tire Shortages
June 30, 2011




Shortages may become an issue within India’s tire industry following the release of a quality control order by the country’s Department of Commerce.

Reporting on the threat, the Business Standard newspaper explains that the order prevents the sale of tires and tubes in India unless they feature a Bureau of Indian Standards (BIS) mark or a certification mark licence is otherwise obtained. The business daily also states industry sources claim the country’s tire manufacturing industry “has come to a standstill” as it possesses a substantial inventory that cannot be sold without the BIS mark.

Although data on domestic manufacturers’ existing stock levels is not available, sources told the Business Standard that the total number of tires manufactured in 2010-11 is around 57.2 million units. They added it would take time to have tires BIS-certified as manufacturers first need to establish necessary infrastructure within their plants in order to meet BIS requirements. The Department of Commerce control order, incidentally, does not cover tires imported by OEMs for sale in the replacement market.

The newspaper reports that a number of industry bodies and tire manufacturers have approached the Bureau of Indian Standards and Department of Commerce for an extension of the order, while others have applied for a stay. Some officials, however, have apparently commented that India’s tire industry is panicking unnecessarily, as the control order was postponed several times before its introduction and there is thus nothing new about it. (Tyres & Accessories)




NR prices move upwards in Tokyo (June 30, 2011)
June 30, 2011




On Tokyo’s Tocom Exchange, prices for the six-month contract recovered by a further yen 7 overnight, trading at yen 365 ($4.53) per kg on Thursday 30 June. Shorter-dated prices were unchanged, at around yen 364.

In Singapore, SGX said September RSS3 was up around $0.08 on Wednesday’s prices at around $4.53. Short-dated TSR 20 was also trading up by about $0.02 at $4.35.

In India, the NMCE saw July deliveries rise by two rupees to around Rs210 ($4.69) per kilo

In China, the Shanghai Futures Exchange also saw prices rise by nearly a yuan, with July deliveries trading at around Yuan 33.2 ($5.13) per kilo.







Japanese car production down by 31% in May
June 30, 2011




Tokyo — Japan’s production of cars in May 2011 was recorded as 489,723 units, according to JAMA, the Japanese vehicle makers’ federation. Compared with the 709,113 units total recorded for the same month of the previous year, this is a decrease of 219,390 units or 30.9%, a smaller decrease than in any of the months since Japan’s March earthquake.

Domestic sales in May 2011 stood at 237,364 vehicles, down 33.4% as compared with the same month of the previous year.

Exports (result) stood at 59.5 % as compared with the same month of the previous year.

Toyota’s production was less than half the figure from a year ago, but Nissan and Mitsubishi both produced more than a year ago.

Motorcycle production in May 2011 was recorded as 53,105 units. Compared with the 48,192 units total recorded a year earlier this is an increase of 4,913 units or 10.2%, and production increase on the same month of the previous year after four months of downturn.





Thai Rubber Should Hold Above $4.0/Kg by Thai Rubber Association
June 30, 2011




The price of Thailand’s benchmark rubber could fall in July and August because of a seasonal rise in supply but it should not go below $4.0 per kg in the second half of 2011, the president of the Thai Rubber Association said on Thursday (June 30).

The benchmark RSS3 grade is currently trading at $4.65. “Fundamentally, demand remains strong and I believe if prices dropped near to $4.0 per kg, that would be a level that would attract back buyers,” Pongsak Kerdvongbundit told Reuters.

He saw $4.0 as a strong support level because the outgoing Democrat-led government had promised to intervene if prices went below that.

Thailand holds a general election on Sunday, July 3. “Although there’s a new government coming, I believe it will not let prices fall below the level the previous government has supported, in order to retain popularity among farmers,” Pongsak said.

Thailand is the world’s biggest producer of rubber. Thai smoked rubber sheet (RSS3), recognised as the world benchmark, surged to a record high of $6.40 per kg in mid-February as dry weather cut supply in major producing countries at a time when demand was strong, especially from tyre industries in China, Japan and India.

But the price plunged to $4.50 per kg in March, when a devastating earthquake hit Japan, raising fears about demand from the car industry in Japan in particular.

Pongsak said he expected strong demand in the second half of the year, although supply is also rising now that rain has stopped in the south, which produces 90 percent of Thailand’s annual output of around 3.2 million tonnes.

He said high prices in the past few months and uncertainty about the global economy had deterred buyers.

“Only big buyers continued to buy in the past few months when prices were still high, and they bought in dribs and drabs. But I expect more to resume buying to replenish stocks when prices ease,” Pongsak said.

Japan’s crude rubber inventories fell 3.5 percent in the period from May 20 to May 31, reflecting firmer demand from car makers as production gradually recovered from disruption caused by the earthquake, according to the Rubber Trade Association of Japan.





Rubber price to remain strong: DBS Vickers
June 30, 2011






Natural rubber prices are expected to remain strong with the Technically Specified Rubber 20 (TSR20) grade being maintained at an average of US$4,251 per tonne next year and US$4,157 per tonne in 2013.
The rubber grade currently fetches US$4,200 per tonne.
DBS Vickers Research (Singapore) Pte Ltd, in its regional rubber research note today said, the strong price is due to growing automotive demand from emerging countries and tight supply.
“Some moderation is expected from 2013 onwards as new supply from trees planted during 2005-2008 becomes available in the market,” it said.

The global rubber planted areas are also expected to increase to an estimated 14.9 million hectares by 2020 from the 11.3 million hectares, currently.
“Based on our projections, a majority of natural rubber supply over the next ten years should come from outside the traditional top three producers, Thailand, Indonesia and Malaysia,” DBS Vickers said.
Of the about 5.3 million metric tonnes increase in supply between 2010 and 2020, the research note stated, 3.1 million metric tonnes would come from emerging natural rubber producers such as Myanmar and Vietnam.
Relative to total output however, Thailand should remain the largest contributor to supply with 25.1 per cent.
“We are also anticipating the global demand for natural rubber to increase by 3.7 per cent annually in the next 10 years, with volume reaching 15.4 million metric tonnes by 2020 from 10.7 million metric tonnes, currently.
“This, is on the back of increased demand from emerging markets, namely China and India,” the research house said — BERNAMA





RUBBER-Tokyo futures higher, but rising supply limits gains
June 30, 2011




TOKYO, June 30 (Reuters) – Key Tokyo rubber futures rose 1.5 percent early on Thursday as oil prices jumped and shares rallied after Greece moved a step closer to securing international aid, but concerns over rising supply from producing countries limited gains.

FUNDAMENTALS

* The key Tokyo Commodity Exchange rubber contract for December delivery <0#2JRU:> was up 5.4 yen at 363.2 yen per kg as of 0040 GMT. The benchmark contract rose as high as 365.7 yen.

* The most active Shanghai rubber contract for September delivery rose 360 yuan to finish at 31,060 yuan ($4,800) per tonne on Wednesday.

* The heavy rain that has hit top producer Thailand for weeks has stopped, allowing farmers to tap more latex, so supply is likely to rise gradually.

* Oil jumped as much as 3 percent on Wednesday, ending at the highest level in a week, as sharp drawdowns in U.S. crude and gasoline stocks fed a rally spawned when Greece passed an austerity plan to avoid a sovereign debt default.

* The dollar slipped to 80.71 against the yen, off this week’s high of 81.26.

* For the top stories in rubber market and other news, click , or

MARKET NEWS

* Japan’s benchmark Nikkei average opened up 0.4 percent at 9,838.09 on Thursday, following rallies in Wall Street.

* Wall Street closed its best three-day run in three months on Wednesday after the Greek parliament approved austerity measures to avoid defaulting on its debt.

* Fewer cars on dealer lots and higher prices — factors that led to disappointing U.S. auto sales in May — look to hold June results in check.

* BMW , the world’s largest maker of luxury cars, expects to maintain double-digit sales growth this year in Brazil, where it may build an assembly plant, a senior executive said in an interview.

* South Korea’s Hyundai Motor Group said on Thursday it was targeting to raise U.S. auto sales by 18.2 percent this year to 1.06 million vehicles.








Natural rubber price to slip on lower Chinese
June 29, 2011




Thiruvananthapuram: Natural Rubber (NR) price is likely to fall globally in the short term, predicts ANRPC ( Association of Natural Rubber Producing Countries), in its latest market analysis report. One of the main reasons would be the fall in the NR appetite of China and Malaysia, the report said.

Import of NR by China, a crucial NR consumer in the recent times, has taken a low pace during the second quarter (April-June) of this year.

Jom Jacob, senior economist, ANRPC estimates that China’s NR consumption in April-June could fall by 1.3%. In Malaysia NR consumption as fallen by 16% in January-April and is expected to fall by 14% in April-June. This is because the glove-manufacturing industry in Malaysia has been shifting from rubber-glove to nitrile-glove, Jom Jacob told FE.

In China, the import volume fell from 2,80,000 tonne in March to 2,44,000 tonne in April and further down to 2,10,000 tonne in May. The fall in consumption in these two countries are significant because China, Malaysia and India are the highest NR consumers, especially among ANRPC members. According to the ANRPC bulletin (June 2011), the most important factor likely to push down global NR price is the growing indication of another global economic slowdown.

“This can reduce speculative investment in commodity market. As a consequence, Thai baht, Indonesian rupiah and Malaysian ringgit may go weaker against dollar,” says Jom Jacob. However, the ANRPC analysis is not bleak over the NR market. It points out that Japan’s return to normalcy after tsunami could give recovery to rubber prices.

At the same time, supply will be slow till the end of the year, says ANRPC report. This year’s “post-wintering” period didnot see a normal expected rise in supply of NR. Tapping days were lost to rain. There was some damage to trees,due to over-exploitation during earlier months, when price remained very high. The age-structure of trees were also unfavourable, says the report. In short, the experts predict that supply is likely to remain low and that demand prospects are uncertain going by the current global economic trends.