Falling India passenger car sales dampens metals, rubber industry

Falling India passenger car sales dampens metals, rubber industry
September 28, 2011



NEW DELHI (Commodity Online): The deceleration in India passenger car sales may impact energy, metals and natural rubber demand in the country. According to CRISIL Research, the fall in growth in car sales can be attributed to soaring petrol prices and hike in the interest rates by the Reserve Bank of India (RBI).

CRISIL Research expects the car sales growth to decline to 2-4% against the earlier forecast of 8-10%.

The domestic market for steel, aluminum, natural rubber may be dampened with the fall in car sales.

Petrol price was raised by 3 rupees to 66.84 per litre (price in Delhi) has been one of the major reason for the sales to go down and also the hike in interest rates to 25 Base Points (bps) by RBI. RBI has raised the interest rates for the 12thtime in a year.

The cost of owning a car has increased significantly by 12-14% due to frequent increases in fuel price and interest rate.

Earlier in 2008, India car sales had touched the lowest 1.4% on global recession. The dealers and the car manufacturers are offering discounts and gift coupons to promote sales but results are not forthcoming.

The demand for diesel cars like Maruti Suzuki –Swift, Swift Dzire, Mahindra Logan and Ford Fiesta has risen. The market for the used diesel cars is also picking up.





Tyre prices seen stable next few months
September 28, 2011





MUMBAI, SEPT. 28:

As demand from the auto market slows down and the cost of natural rubber drops, tyre prices are now expected to remain steady over the next few months.

This is after nearly all major tyre makers, such as Apollo, JK Tyres and Ceat, have increased product prices by almost 8-10 per cent across 3-4 tranches in this year itself.

“If input prices are softening and the demand is also low, it is unlikely that the prices will be revised upwards. Performance of tyre companies in the first quarter saw a drop, so lower input costs should bring them back into the black,” a senior tyre-industry source told Business Line.

He added that apart from demand from carmakers being flat, aftermarket (tyre replacements) sales have also come down as customers are deferring purchases on a poor market sentiment. Demand for commercial vehicles is not as bad, though even their sales growth has moderated to single digits.

According to the Ministry of Commerce and Industry’s Rubber Board, prices of natural rubber (RSS 4) have now come down to Rs 214 a kg, from a peak of around Rs 245 a kg a few months ago. However, the industry would be more comfortable if prices were to come down to Rs 180-190 a kg.

“An increase in prices is unlikely over the next few months, especially as rubber prices have come down. The market is not in a condition to absorb higher prices. However, if the rupee devalues significantly and imports become expensive, then we may have to look at our product prices,” Mr Anant Goenka, Deputy Managing Director, Ceat Ltd, said.

Rubber prices have reduced because of improved supplies in recent times — Kerala saw a few days of tapping in September, which is not usually the case. Moreover, because of good rains this time, production is now expected to go up.

JK Tyre expects to take a call on product prices in the first week of October. It is waiting to review the demand situation and hoping that crude oil and rubber prices settle down for a longer period.

“Some softening has happened in natural rubber prices, but cost of other input materials, like carbon, fabric and synthetic rubber, have not come down as yet. Prices could go up to improve margins, but we have to judge the market response and decide,” said Mr A.S. Mehta, Marketing Director, JK Tyre & Industries.




Market on Sept 28: Global cues sap spot rubber
September 28, 2011





KOTTAYAM, SEPT 28:
Domestic rubber prices ruled weak on Wednesday. It remained under pressure following sharp declines in international markets.

On the spot, sentiments were further dampened by another weak closing on the National Multi Commodity Exchange (NMCE).

However, as climatic conditions improved favouring tapping and production, more supplies are expected from major rubber-growing areas that may limit sharp gains during the season. The trend was partially mixed.

Sheet rubber dropped to Rs 209.50 (210) a kg, according to traders.

The grade slipped to Rs 210.50 (211) a kg both at Kottayam and Kochi, according to the Rubber Board.

In futures, the October series weakened to Rs. 210.10 (212.78), November to Rs. 207.00 (209.83), December to Rs. 207.49 (209.77), January to Rs. 208.50 (210.92) and February to Rs.209.05 (211.04) per kg for RSS 4 on the NMCE.

RSS 3 (spot) moved down to Rs 210.80 (214.54) a kg at Bangkok.

The October futures for the grade declined to ¥ 298.3 (Rs. 190.31) from ¥ 310.6 a kg during the day session but then recovered marginally to ¥ 300.8 (Rs. 191.91) a kg in the night session on Tokyo Commodity Exchange.

Spot rubber rates (Rs/kg) were: RSS-4: 209.50 (210); RSS-5: 207 (207); ungraded: 198 (198); ISNR 20: 206 (207); and Latex 60%: 132.50 (133).






Tokyo futures fall 6 pct to break 300 yen (Sept 29)
September 29, 2011





TOKYO, Sept 29 (Reuters) – Tokyo rubber futures broke through the key support of 300 yen in early Asian trade on Thursday, tumbling 6.3 percent, tracking losses in oil and other commodities amid uncertainty over the U.S. economy and global financial markets.

FUNDAMENTALS

* The key Tokyo Commodity Exchange rubber contract for March delivery <0#2JRU:> was down 19.5 yen at 290.2 yen as of 0045 GMT. The contract fell as low as 289.5 yen, the lowest since August 2010.

* On Wednesday, investors were disappointed by less-than-expected speculative buying in China ahead of a week-long national holiday starting in early October, and the March contract dropped as much 6.2 percent before closing down 3.1 percent.

* Key Shanghai rubber futures fell by their daily limit at the open to 26,010 yuan per tonne on Thursday, tracking losses in Tokyo rubber futures, oil and other commodities. On Wednesday, the most active Shanghai rubber contract for January delivery fell 2.6 percent to close at 27,540 yuan per tonne. Volume stood at 1,349,048 lots.

* The dollar was steady against the yen on Thursday at 76.54 , with investors alert for Japanese intervention ahead of the end of their financial half-year. The yen has gained 5.7 percent so far this year.

* Brent crude oil futures slid more than $1 a barrel in early Asian trade, as investor concerns about Europe’s sovereign debt problems mounted, the U.S. dollar gained and U.S. crude inventory build weighed.

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

MARKET NEWS

* The Nikkei average fell on Thursday, after a U.S. sell-off led by commodity-related shares as ongoing uncertainty about a resolution to Europe’s debt debacle raised growth fears.

* For the first time since the 1959 revolution, Cubans will have the right to buy and sell cars in a much-anticipated reform under President Raul Castro, another step toward greater economic freedom on the communist-led island.

* Car sales in India are heading for growth of less than 5 percent, to their slowest in a decade, as rising fuel prices and higher cost of loans continue to bite, indicating a further slump in demand.






Rubber Drops to 13-Month Low as Europe Crisis May Stall Recovery
September 29, 2011





Rubber tumbled to a 13-month low, heading for the worst quarterly loss since 2008, as concern grew that Europe’s debt crisis may deepen, sending global economies into a recession and damping raw-material demand.

March-delivery rubber plunged as much as 6.5 percent to 289.5 yen a kilogram ($3,783 a metric ton) before trading at 298.1 yen on the TokyoCommodity Exchange at 10:46 a.m. The most-active contract has lost 18 percent this quarter, set for the worst performance since the three months ended Dec. 31, 2008.

Asian stocks extended a global sell-off amid concern that divisions among European leaders will hamper efforts to solve the region’s debt crisis. Japan’s currency climbed against most of its peers as demand for a haven increased, cutting the appeal of yen-based futures.

“The market is vulnerable to selling amid concern the European crisis will drag global economies into recession,” Ken Kajisa, an analyst at broker ACE Koeki Co., said today by phone.

Fifty-nine percent of respondents to a quarterly Bloomberg Global Poll of investors, analysts and traders said China’s gross domestic product, which rose 9.5 percent last quarter, will gain less than 5 percent annually by 2016. Twelve percent see such a slowdown within a year, and 47 percent said it will occur in two to five years, the poll showed.

The European Commission is resisting a push to impose bigger writedowns on banks’ holdings of Greek government debt than those agreed at a July 21 summit, an official said on condition of anonymity because the deliberations are private.

“It’s all about Europe,” saidKenichi Hirano, general manager and strategist at Tachibana Securities Co. in Tokyo. “The focus is if they can establish a unity, and the market’s going through ups and downs according to developments.”

In Shanghai, January-delivery rubber lost as much as 5.6 percent to 26,010 yuan ($4,066) a ton before trading at 26,520 yuan.

The cash price of Thai rubber dropped 1.1 percent 132.60 baht ($4.25) a kilogram yesterday, the Rubber Research Institute of Thailand said on its website. Rains spread across 80 percent of the Thai south, disrupting tapping, according to the group.








Tokyo futures lose 2.7 pct, outlook glum (Sept 29)
September 29, 2011





TOKYO, Sept 29 (Reuters) – Key Tokyo rubber futures tumbled as much as 6.6 percent on Thursday but recovered to the key support level of 300 yen, settling down 2.7 percent, with market sentiment staying weak on growing worries over the global economy.

The key Tokyo Commodity Exchange rubber contract for March delivery <0#2JRU:> settled down 8.2 yen at 301.5 yen per kg after falling as low as 289.5 yen, the lowest since August 2010.

Key Shanghai rubber futures for January delivery fell by their daily limit at the open to 26,010 yuan per tonne.

The contract lost 905 yuan or 3.3 percent to close at 26,635 yuan per tonne, with volume falling slightly to 1,009,050 lots.

“The market will struggle to maintain the 300 yen mark,” said Naoki Asami, chief broker at trading house Kanetsu. “Downward pressure remains strong due to higher inventories and the ongoing problems of the global economy.”

The dollar was steady against the yen at 76.52 , not far from the record low of 75.94 hit in August. The yen has gained 5.7 percent so far this year.

Brent crude erased losses as the dollar weakened, while a bigger-than-expected increase in U.S. crude stockpiles heightened concern that demand may slow, and doubts over the euro-zone rescue fund continued to weigh on confidence.

India’s monsoon rains were 33 percent below average in the week to Sept. 28, the weather office said on Thursday, as the four-month rainy season begins to retreat after a normal spell this year, boosting output prospects for crops such as rice and cane.