India: Removal of dumping duty on tyre imports may hit industry, growers
August 12, 2011
KOCHI, AUG. 12:
The removal of anti-dumping duty on truck and bus tyre imports from China and Thailand is likely to affect the tyre industry and rubber growers, sources in the trade said.
They said that China has built huge capacities in tyre commanding some of the lowest cost in production. It can swamp the Indian market with cheaper imports that will have a direct bearing on the Indian industry.
EYES ON THAILAND
Thailand has huge rubber production of around 30 lakh tonnes (lt) even as it consumes only 7-8 lt per year. This would act as a magnet for Indian tyre majors to set up production units there, said Mr N. Radhakrishnan, Advisor to the Cochin Rubber Merchants Association (CRMA).
While the country’s rubber production just about meets domestic demand, the huge surplus in Thailand and Indonesia and cheap prices could act as a major catalyst. “Prices in Thailand and Indonesia wil work out substantially lower once you cut out the broker commission, freight and handling charges and duties,” Mr Radhakrishnan said.
Already several global tyre majors are reported to be deliberating on setting up production units in Thailand. In case anti-dumping duty on tyre imports are not re-imposed, similar moves by tyre companies cannot be ruled out in the not too distant future, sources said.
CASCADING IMPACT
The cascading impact would also be felt on growers. With each truck tyre consuming close to 40 kg of rubber, the demand for Indian rubber would fall, trade sources said. And truck, bus and heavy duty tyres account for close to 70 per cent of the domestic consumption.
A section of the trade pointed out that movement of capital to set up business enterprise outside the country would be an inevitable part of globalisation and it cannot be stopped.
Movement of capital and enterprise outside the country is fine, but should it be at the cost of Indian industries and farmer remains the moot question.
Malaysia: Rubber prices set to advance next week
August 13, 2011
Malaysian rubber prices are expected to increase next week in line with the prices of other commodities which are also
projected to rise, dealers said.
A dealer said the performance of other commodities performance would influence the rubber price.
On week-to-week basis, the Malaysian Rubber Board’s official physical price for tyre-grade SMR 20 fell 7.5 sen to 1,375.5 sen per kg against 1,383 sen the previous week.
Latex in bulk decreased 35.5 sen to 850.5 sen per kg from 886 sen last Friday.
The unofficial seller’s closing price for tyre-grade SMR 20 fell 10.5 sen to 1,367.5 sen per kg versus 1,378 sen last week while latex in bulk eased 32 sen to 850 sen per kg from 882 sen previously. — Bernama
Apollo Tyres goes to Laos for rubber to meet demand
August 11, 2011
KOCHI, AUG 11:
Considering the shortage faced by the domestic tyre industry for natural rubber, Apollo Tyres Ltd has acquired 10,000 hectares in Laos for a rubber plantation.
Mr Onkar S. Kanwar, Chairman and Managing Director, Apollo Tyres Ltd, said that the objective to acquire land abroad on lease is to meet 25 per cent of the company’s requirement in the next five years.
Apollo is the first company to acquire land for growing rubber and it would take 2-7 years for the yield to be tapped, he said.
He told reporters, after a meeting of the company’s board of directors, that the tyre industry in India is passing through a crisis due to increase in raw material prices and shortage of natural rubber.
At present there is a shortage of 2 lakh tonnes of rubber and the industry has requested the Government to allow duty-free import of rubber.
Mr Kanwar said the company proposes to invest Rs 500 crore in the current financial year to augment its production capacity in India and abroad.
Of the Rs 500-crore, €6 million would be invested in Europe, $30 million in South Africa and the remaining in India. The company will also invest Rs 40 crore in its Perambra unit in Chalakkudy and Premier Tyre facility in Kochi, he added.
The rest would be utilised for capacity augmentation at the Chennai plant, which manufactures tyres for trucks and cars. He said the plant capacity would be increased to produce 6,000 tyres per day for trucks, from 3,000 at present, and 16,000 cars tyres per day, from 8,000.
Mr Neeraj Kanwar, Vice-Chairman and Managing Director, said that the company aims to be among the top 10 global tyre companies in the next five years. The company’s largest unit is situated at Limda, in Gujarat, and its two other units are in Perambra and Kalamassery, Kerala.
Its latest next generation plant is near Chennai and the four plants together have a production capacity of around 1,180 tonnes of tyres a day.
In South Africa, the Ladysmith and Durban plants account for a combined capacity of around 180 tonnes and the Enschede plant in The Netherlands adds another 180 tonnes a day, taking its total current production capacity to around 1,550 tonnes a day.
He pointed out that India is Apollo Tyres’ largest market, accounting for 62 per cent of revenues, while Europe contributes 25 per cent and South Africa 13 per cent. The company exports tyres to over 70 countries from India, Europe and South Africa.
The drop in car sales in India is partly offset by exports to Europe, he said adding that there is every possibility for a further hike in prices of tyres due to increase in raw material costs and drop in OE sales.
Rubber market on Aug 11: Spot rubber improves on supply concern
August 11, 2011
KOTTAYAM, AUG. 11:
Physical rubber prices turned better on Thursday. The market improved on supply concerns following widespread rains during the past 48 hours. A firm closing in the international futures lent further support at lower levels, though domestic futures lost initial gains on late trades. However the gains were limited indicating that the market was still under pressure on higher production, stocks and imports. The trend was partially mixed.
Sheet rubber increased to Rs 205 (204) a kg, according to traders. The grade moved up to Rs 204.50 (203.50) a kg both at Kottayam and Kochi, as reported by the Rubber Board. The August series slipped to Rs 205.01 (206.54), September to Rs 203.70 (203.94), October to Rs 202.50 (203.90), November to Rs 202.02 (204), December to Rs 203.70 (204.70) and January to Rs 205.50 (207.27) a kg for RSS 4 on the National Multi Commodity Exchange.
RSS 3 (spot) firmed up to Rs 212.57 (209.93) a kg at Bangkok. The August futures increased to ¥353.5 (Rs 209.19) from ¥352 during the day session and then to ¥360 (Rs 213.11) a kg in the night session on the Tokyo Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 205 (204); RSS-5: 201 (200); Ungraded: 194 (192); ISNR 20: 203 (203) and latex 60 per cent: 132 (132).
Rubber Board, India: Domestic rubber imports jump 12 pc in July
August 12, 2011
MUMBAI: Imports of rubber in India, the world’s second-biggest consumer, provisionally rose 11.97 percent on year to 20,127 tonnes in July as tyre makers cashed in on lower customs duties, the state-run Rubber Board said in a statement.
Rubber imports rose 10.4 percent in April-July to 62,056 tonnes. Shipments are expected to touch a record of 200,000 this fiscal year. India, the world’s fourth biggest producer, imports natural rubber from Thailand, Indonesia, Malaysia and Vietnam.
The federal government had allowed imports with a duty of 20 percent or 20 rupees a kilogram (kg), whichever is lower, for the current financial year, effectively cutting the import duty.
Consumption rose 4.8 percent to 323,875 tonnes in the first four months of the fiscal year, while production also rose 5.8 percent 238,400 tonnes, the board said.
Tokyo futures fall as slide in oil, stocks weighs (Aug 12)
August 12, 2011
TOKYO, Aug 12 (Reuters) – Key Tokyo rubber futures erased earlier gains to settle slightly lower on Friday, as a slide in oil prices and sluggish stocks reflected concerns about the global economic outlook and raised questions about demand for raw materials.
The benchmark rubber contract on the Tokyo Commodity Exchange <0#JRU:> for January delivery settled down 0.5 yen at 363.5 yen per kg, after rising as much as 6.9 yen or 1.9 percent to 370.9 yen per kg earlier in the day.
The market ended the week down about 5 percent, the biggest weekly loss in three months, as global financial markets plummeted earlier in the week on the downgrade of U.S. debt and concerns over European sovereign debt problems spreading.
The plunge in global financial markets also dragged benchmark rubber futures to the lowest for any benchmark since June 29.
Traders said the market may test the downside next week after finishing below a key technical level, its 50-day moving average, which stood at 377.1 yen on Friday.
The most active rubber contract on the Shanghai commodity exchange for January delivery rose 125 yuan to close at 34,295 yuan ($5,363.203) per tonne on Friday. Volume stood at 580,486 lots.
Tokyo stocks dipped further below the 9,000 line on Friday, extending hefty losses sustained during the most volatile week since the March 11 quake as the strong yen prompted foreigners to sell carmakers, dragging Toyota Motor to its lowest level this year.
A ban on short-selling of financial stocks in four European countries including France takes effect on Friday, a coordinated attempt to restore confidence in markets hit by rumours and higher borrowing costs.
But European stocks fell in early trade on market talk that core euro zone economy France faces a credit rating downgrade, pushing the dollar down 1 percent versus the Swiss franc while the euro also extended its losses.
The weakness of the dollar pinned the yen near its record high versus the U.S. currency, deflating yen-based TOCOM rubber futures prices and dampening investors’ appetite.
Brent slipped $1 to below $108 a barrel on Friday, reversing direction after two straight days of gains, as the dollar strengthened and concerns about demand in industrial nations weighed on prices.
Glove, tyre industries largest consumer of natural rubber
August 13, 2011
KUALA LUMPUR: The local rubber gloves, tyres and tubes and rubber thread industries remained the largest consumer of domestic natural rubber (NR), taking up 26,439 tonnes in June, said the Statistics Department.
Of the total domestic consumption at 30,874 tonnes for the month under review, rubber gloves accounted for 67.8%, rubber thread 9.3%, tyres and tubes 8.5% and others 14.4%.
The department, in its June rubber report released yesterday, said NR production in June was up 17.5% at 84,208 tonnes compared with the previous month.
The smallholding sector also continued to be the largest contributor to NR production at 94.6%, while the balance 5.4% was from the estate sector.
The department also said NR stocks were 5% higher at 122,972 tonnes in June, with 87% still held by the rubber processors.
As for NR exports, there was a 15.5% decline in total exports at 68,591 tonnes in June from a month ago.
Standard Malaysian Rubber (SMR) was still the highest type of rubber exported at 94.6% or 64,876 tonnes, of which 39.4% was from the SMR 20 grade.
A majority of NR exports goes to China (26.4%), followed by Germany (14.5%), Iran (5.6%), the United States (5.3%), South Korea (3.3%), Finland (3.2%), Turkey (3%), Britain (2.9%), Brazil (2.8%) and France (2.8%).
The NR imports in June, meanwhile, increased marginally by 0.3% to 45,954 tonnes. Almost half of the total NR imports consists of latex concentrate at 22,875 tonnes.
Thailand is the top major NR supplier to Malaysia at 66.3% or 30,448 tonnes for the month under review.
On NR prices, the Statistics Department said the average monthly price was mixed in June.
The average price of latex concentrate eased 2.1% to RM9.23 per kg and SMR 20 was up 1.4% to RM13.54 sen per kg.
For the month under review, the Statistics Department said NR productivity in the estates was recorded at 117.5 kg, up 41.4% from a month ago and 7.8% year-on-year.
The average number of tapping days recorded was 23 days with Negri Sembilan and Pahang among the states with the highest number of tapping days at 25 days.
Saturday, August 13, 2011
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