Rubber consumption falls 8% to 74,000 t in Sept
October 13, 2011
NEW DELHI, OCT 13:
Natural rubber consumption fell 8 per cent to 74,000 tonnes in September 2011, while production rose 3 per cent to 80,200 tonnes.
The consumption stood at 80,500 tonnes in September 2010, whereas output stood at 77,500 tonnes in the same period, according to data released by the Rubber Board.
On a month-on-month basis, rubber consumption declined by about 4 per cent to 74,000 tonnes last month against 77,000 tonnes in the previous month.
Natural rubber imports fell 73 per cent to 9,099 tonnes last month from 33,477 tonnes in the year-ago period. Overseas shipments jumped more than 17-fold to 3,313 tonnes in September this year from 194 tonnes in the same period of the previous year.
Rubber production in the first half of the current fiscal rose 4.3 per cent to 3,91,400 tonnes from 3,75,250 tonnes in the same period of the previous fiscal.
Consumption rose about 2 per cent to 4,76,215 tonnes in April-September 2011-12 fiscal from 4,69,050 tonnes in the year-ago period.
Imports fell to 88,760 tonnes from 1,18,535 tonnes, while exports jumped to 16,503 tonnes from 4,558 tonnes. The closing stock of rubber in 2011-12 is projected at 2,79,477 tonnes.
According to the Rubber Board, domestic production in 2011-12 is estimated at 9,02,000 tonnes, while consumption has been projected at 9,77,000 tonnes.
The board expects imports of natural rubber to total 1.2 lakh tonnes and exports of 50,000 tonnes in 2011-12.
Natural rubber prices continue steady rise (Oct 13)
Written by HMH | October 13, 2011 | 0 |
London — Rubber prices continue to move slowly upwards overnight, remaining solidly above $4. On Tokyo’s Tocom Exchange, prices for the six-month contract increased by 4 yen, to close at yen 317.7 ($4.012) per kg on Thursday 13 Oct. Shorter-dated prices also rose to close at yen 312.6.
In Singapore, SGX said TSR20 for delivery in March 2012 fell by 5 cents to close at $4.15.
In India, NMCE said October deliveries rose by a fraction of a rupee, to close at Rs 216.8 ($4.39) per kilo.
In China the Shanghai Futures Exchange was unchanged October deliveries trading around Yuan 29.5 ($4.63) per kilo.
Japan’s imports of natural rubber in August fell 0.4% year on year
Written by HMH | October 13, 2011 | 0 |
(Reuters, Oct 12) Rubber Trade Association of Japan (Rubber Trade Association of Japan) released data show that Japan’s eight months of natural rubber imports fell 0.4% to68,967 tons, compared with the previous month increased 17% .
As of 9 January 30 , the Japanese Inventory of natural rubber, 11,561 tons, compared with 9 months 20 days estimated10,061 tons of high 15% . Inventory of natural latex from the383 tons to 403 tons of solid synthetic rubber stocks from the1,669 tons to 1,675 tons.
Source: Dow Jones
Tyre makers: Fall in rubber prices to lift margins by 200-300 bps
Written by HMH | October 13, 2011 | 0 |
The Eurozone crisis triggered a global markets rout that has led to a decline in prices across asset classes. The BSE Sensex declined 12% from July to September and tyre companies were also pummelled. With the fall in commodities, global rubber prices have declined almost 30% over the past three months, which comes as a blessing for tyre makers.
Any improvement in market sentiment could trigger a rally in these companies as profitability will improve with the fall in the key tyre-making ingredient.
International rubber prices have been volatile since January 2011, but fell to their lowest in September 2011. Given that local prices follow the global trend, a further decline in rubber prices can be expected. One of the main reasons for this is the sluggishness in demand from the automobile sector. But the replacement market can be a redeeming factor.
The fall in rubber prices will improve operating profit margins by at least 200-300 basis points on an average. Moreover, a weaker rupee will benefit exporters.
Apollo Tyres earns about 34% of its total revenue from operations in Europe and South Africa and has one of the highest operating profit margins in the industry. Yet, over the past few quarters high rubber prices have led to margin compression. Its share price has fallen around 30% in the July-September period. At Rs 57, its trades at 6.5 times its trailing 12-month earnings and is currently one of the cheapest stocks in the sector.
JK Tyre and Ceat have also fallen over 30% each during the same period, but JK Tyre is a better bet. As of March 2011, its annual turnover was Rs 5,945.44 crore. At Rs 70 it trades at 6.7 times its trailing 12-month earnings and is fairly priced. Ceat, on the other hand, clocked an annual turnover of Rs 3,602.39 crore and trades at Rs 75, which is 12.7 times its earnings, making it expensive.
MRF, the largest domestic tyremaker with a 21% market share, has resisted the decline in the markets, falling only 4%. Meanwhile, Balkrishna Industries has risen 6%.
Both companies earn a significant share of their revenue through exports and, therefore, will gain from the rupee depreciation. These stocks trade at 9.32 times and 8.23 times earnings per share and are fairly valued.
Friday, October 14, 2011
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