Tyre companies demand duty-free import of 1 lakh tonne rubber

Tyre companies demand duty-free import of 1 lakh tonne rubber
October 25, 2011





KOCHI: Tyre manufacturers have sought duty-free import of 1 lakh tonne natural rubber as high price and weak rupee did not allow them to complete their special import quota of 40,000 tonne. Tyre companies say recent floods in Thailand and active buying by China may lead to another flareup in the global rubber prices.

The import of 40,000 tonne had been allowed by the government this fiscal year at a reduced duty of 7.5% against the normal 20% duty. Of this quota, the industry has imported around 25,000 tonne. “Higher international prices and the depreciation of rupee have prevented the industry from completing the full lot of imports,” said Rajiv Budhraja, director general of Automotive Tyre Manufacturers’ Association. Now, with a falling rupee, the association is requesting the government to allow duty-free import of 1 lakh tonne.

The association has expressed its reservation on the rubber stock figures provided by the Rubber Boardand says it should be reviewed. The board is expected to come out with a revised estimate by the end of November. The board estimate for the stock at the end of September 2011 is 2,79,477 tonne, which some traders feel is a tad high.

International rubber prices dropped to Rs 195.72 per kg last Friday, a fall of Rs 6 from the previous day. Though there is no trading in Bangkok on Monday, Tokyo and Shanghai futures have moved up on positive reports on a resolution to Europe’s debt worries. Floods in Thailand, the biggest rubber producer, have not affected rubber plantations but some car factories in the country have stopped production, which could affect the demand.

Though local production has gone up over the last one month, growers are reluctant to sell in anticipation of a better price. “There were continuous tapping during the last one month but not much selling. Demand has not rebounded as the original equipment market still down while the replacement tyre segment has not been able to compensate for this,” said George Valy, president of Rubber Dealers Association.







Market on Oct 27: Spot rubber improves on supply concerns
October 27, 2011





KOTTAYAM, OCT. 27:
Physical rubber prices improved on Thursday. The market improved following sharp gains in domestic futures, coupled with supply concerns amid widespread North-East monsoon rain.

Reports from international markets were also positive. Sheet rubber improved to Rs 212 (211) a kg both at Kottayam and Kochi, according to traders and the Rubber Board. The trend was mixed.

The country rubber consumption is expected to slow down this year to 0.9 per cent from 4.3 per cent last year. It mainly originates from the general-rubber-goods sector which has been hit by a series of hikes in interest rate and energy prices, apart from rise in other input costs.

Figures available from Automotive Tyre Manufacturers’ Association (ATMA) revealed a five per cent annual rise in production of heavy commercial vehicle tyres during the five-months ended August against nine per cent for passenger car tyres and 23 per cent for light commercial vehicle tyres. An estimated 60 per cent of the country’s total demand for rubber comes from auto-tyre manufacturing industry that closely tracks economic trends.

In futures, the November series rebounded to Rs 215.01 (210.12), December to Rs 215.05 (209), January to Rs 216.15 (209.97), February to Rs 217 (211.16) and April to Rs 221.75 (217.48) a kg for RSS 4 on the National Multi Commodity Exchange.

RSS 3 (spot) moved up to Rs 195.88 (194.21) a kg at Bangkok. The November futures increased to ¥296.6 (Rs 192.91) from ¥288.8 a kg during the day session and then ¥302.6 (Rs 196.82) in the night session on the Tokyo Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 212 (211); RSS-5: 210 (209); ungraded: 202 (202); ISNR 20: 200 (200) and latex 60 per cent: 128.50 (128.50).