OUTLOOK-India rubber seen down on imports, global cues

OUTLOOK-India rubber seen down on imports, global cues
December 19, 2011





MUMBAI, Dec 19 (Reuters) – Natural rubber prices in India are likely to ease this week tracking a fall in the world market and as local tyre makers decrease dependence on the domestic market, dealers and analysts said.

At 4:57 p.m. on Tuesday, the benchmark January rubber on India’s National Multi-Commodity Exchange (NMCE) was 0.5 percent up at 20,325 rupees per 100 kg.

The price of the most traded RSS-4 rubber (ribbed, smoked sheet) in the key Kottayam market in Kerala rose 50 rupees to 20,050 rupees per 100 kg.

Spot price in Bangkok, Thailand, declined 461 rupees to 17,718 rupees.

“The drop in world market is depressing local prices. Due to the fall, tyre makers have been importing higher amount of rubber,” said a member of Indian Rubber Dealers’ Federation (IRDF).

India’s natural rubber imports edged up 4.6 percent in November to 15,069 tonnes, the state-run Rubber Board said on Dec. 9, and steep price fall in overseas markets is likely to continue to make imports attractive for tyre makers.

The country’s production during the month rose 4.3 percent on a year ago to 94,400 tonnes, while consumption was 82,000 tonnes compared with 78,010 tonnes a year ago, it said.

India, the world’s fourth biggest producer, imports natural rubber from Thailand, Indonesia, Malaysia and Vietnam.

Tokyo rubber futures ended 1.4 percent lower on Monday, weighed down by worries that Europe’s debt crisis could trim demand plus a drop in oil prices, dealers said.

“Supply situation is very comfortable in the local market. It’s peak tapping season. Arrivals are adequate, despite holding by some farmers,” the member said.

Rubber production in India peaks during Oct-Jan.

India’s tyre output growth is likely to almost halve in the fiscal year ending March 2012 to 12 percent, as vehicle sales slowed because of higher interest rates, hitting demand from automakers, a senior industry official said on Sept. 9.






Thai 2012 rubber output seen up 5%
December 20, 2011





BANGKOK: Thailand expected production of around 3.15 million tonnes of rubber in 2012, about 5% more than the three million forecast for 2011, the head of the country’s rubber exporters’ association said.

“It rained a lot this year and we may face a lot of rain again, so we expect a minimal rise of around 5% in production,” Pongsak Kerdwongbundit, president of the Thai Rubber Association, told Reuters. – Reuters






Spot rubber rules steady



KOTTAYAM, DEC. 19:
Spot rubber closed almost steady on Monday. The only gainer was RSS 4 which improved marginally on covering purchases at lower levels. The reports from the global scene were also not promising. The transactions continued to be meagre.

During last week, NR prices edged lower weighed by increased imports and subdued demand from major consuming industries, analysts said. However, a mild recovery from the two weeks low was witnessed by weekend though the gains were limited on buyer resistance.

Sheet rubber improved to Rs 201 (199.50) a kg according to traders. The grade increased to Rs 200.50 (200) a kg both at Kottayam and Kochi as per Rubber Board.

In futures, the January series closed at Rs 203.45 (202.18), February at Rs 205.45 (204.22), March at Rs 208.49 (207.39), April at Rs 213 (212.40) and May at Rs 214.40 (213.83) a kg for RSS 4 on the National Multi Commodity Exchange.

RSS 3 (spot) dropped to Rs 177.18 (181.79) a kg at Bangkok. The December futures for the grade weakened to ¥250 (Rs 169.70) from ¥253.4 a kg during the day session but then remained inactive in the night session on the Tokyo Commodity Exchange.

Spot rates were (Rs/kg): RSS-4: 201 (199.50); RSS-5: 197 (197); ungraded: 190 (190); ISNR 20: 187.50 (187.50) and latex 60 per cent: 110 (110).







Now is the time to buy a petrol car

Petrol car demand to get a boost if diesel vehicle excise is hiked
Make diesel cars dearer


NEW DELHI, DEC. 19:
Its raining discounts and freebies on petrol cars this month as companies look to buck the ‘model year' syndrome and clear rising stocks. Diesel cars, however, are not being incentivised by most as the demand for such models still continues to outstrip supply.

THE YEAR-END FACTOR

Most companies try to incentivise sales in December every year as it is felt that buyers generally prefer not to buy cars in the last month and wait till January for purchases.

By waiting a month, the date of registration of the vehicle would be for the next year, giving them a higher price upon resale. This leads to a sharp drop in December sales for most manufacturers.

An up to Rs 64,000 lower price benefit is available on new petrol cars starting from the compact segment from carmakers such as General Motors, Maruti Suzuki, Hyundai and Honda. This is part of a combined offer, which includes free insurance and maintenance, freebies and other benefits such as a loyalty bonus.

“Petrol versions have higher discounts because manufacturers want to clear inventory. We have been giving offers since October,” Mr P. Balendran, Vice-President at General Motors India (GMI), told Business Line.

“Our December sales are expected to be at best similar to November. We should see an upward movement only around April-May, depending on the Budget proposals and with other enablers such as interest rates in place,” said Mr Balendran.

Mr Abdul Majeed, Partner at PwC, added, “After the festival season, sales dip in December, plus with new launches coming next year, it makes sense to clear off inventories now.”

WHAT'S ON OFFER

GMI is offering discount in the Rs 33,000 (Beat) to Rs 64,000 (Spark) range across nearly all of its petrol models. Interestingly, the highest discount is on the cheapest car in its portfolio. Honda Siel is offering freebies like a GPS system for the Civic and Accord sedans.

Only for December, Hyundai is offering Rs 50,000 off on the i10 hatch, Rs 34,000 on the Santro and Rs 10,000 on the Verna petrol. This includes an exchange offer. “The best offers are on right now, but diesels have no discount. Wholesales in December will be lower than last month, though retail should be good,” Mr Arvind Saxena, Director of Marketing and Sales, Hyundai Motor India said.

MARUTI'S DECEMBER

A departure form the rest, Maruti Suzuki, felt that December sales could be one of the highest in the year after March. The leading carmaker is also offering higher discounts on petrol cars over other months.

“It's a myth that December sees lower sales, as has been proved by six out of the last seven years. Higher discounts offered and rumours of price hikes in January tend to push customers to buy in December,” said Mr Shashank Srivastava, Chief General Manager of Marketing, Maruti Suzuki.

Maruti's sales are expected to rise this month as it looks to service a large order backlog accumulating over the last many months. Its Manesar plant has just managed to normalise operations after a series of three labour strikes this year.