Rubber mart players to stay on sidelines next week.

Rubber mart players to stay on sidelines next week.
December 24, 2011




The Malaysian rubber market is expected to be quiet next week as most of the players would stay on the sidelines due to the festive season and holiday, dealers said.

A dealer said rubber production, which has been hit by the uncertain weather condition, was expected to influence next week’s prices.

“The market is worried about the shortage situation,” she said.

For the week just-ended, the market was unstable on supply worries as most of the rubber producing countries faced the raining season.

The Malaysian Rubber Board’s official physical price for tyre-grade SMR 20 rose 26.5 sen to 1,053.5 sen a kg from 1,027 sen a week earlier, while latex-in-bulk fell 6.5 sen to 663.5 sen a kg from 670 sen previously.

The unofficial closing price for SMR 20 added 14.0 sen to 1,053.5 sen a kg from 1,039.5 sen on Friday while latex-in-bulk slipped six sen to 664 sen from 670.0 sen last week.

The Malaysia rubber market will be closed on Monday for the Christmas celebration. — Bernama






Synthetic rubber output down 10% in Sept
December 23, 2011





New Delhi, Dec 23 (PTI) Synthetic rubber output fell by 10 per cent to 8,421 tonne in September, while consumption declined by 3 per cent to 33,510 tonne, according to Rubber Board data.
In September last year, the production of synthetic rubber stood at 9,320 tonne and consumption at 34,480 tonne.
The consumption by the auto tyre industry also declined by 5 per cent to 24,010 tonne in September 2011, compared to 25,323 tonne in the year-ago period.
Synthetic rubber is mostly used in the manufacture of tyres in the country.
India”s synthetic rubber imports, however, rose by 7 per cent to 26,760 tonne in September this year from 25,025 tonne in the same period last year.
In the first half of the current fiscal, synthetic rubber production rose to 54,750 tonne from 53,231 tonne in the same period last fiscal, while consumption increased to 2,13,075 tonne from 2,01,625 tonne in the same period.
Similarly, auto tyre industry consumed 1,54,887 tonne in April-September 2011 as against 1,44,126 tonne in the same period of the previous year.
Likewise, the total imports in April-September in this fiscal rose to 1,73,490 tonnes from 1,51,435 tonne in the same period last fiscal.
The total stock of synthetic rubber in the country at the end of September, 2011 stood at 51,015 tonne.






Market on Dec 23: Spot rubber shows mixed trend
December 23, 2011





KOTTAYAM, DEC. 23:

Physical rubber prices showed a mixed mood on Friday. The market appeared to be in a holiday mood with only a couple of days to Christmas and hence most of the participants were reluctant to make any new commitments. The volumes were narrow.

Sheet rubber weakened to Rs 200 (201) a kg according to traders. The grade slipped to Rs 200.50 (201) a kg both at Kottayam and Kochi as quoted by the Rubber Board.

In futures, the January series improved to Rs 204.55 (202.86), February to Rs 206.50 (204.70), March to Rs 209.30 (207.36), April to Rs 213.90 (212.78) and May to Rs 214.50 (213.20) a kg on the National Multi Commodity Exchange (NMCE).

RSS 3 (spot) dropped to Rs 178.92 (179.15) a kg at Bangkok. The Tokyo Commodity Exchange remained closed owing to “The Emperor’s Birthday”.

Spot rates were (Rs/kg): RSS-4: 200 (201); RSS-5: 196 (196); ungraded: 190 (190); ISNR 20: 191 (190) and latex 60 per cent: 110 (110).






Rubber limps, but tyre makers smarting
December 24, 2011





Respite eludes the demand- and margin-deprived Indian tyre industry. As high import costs offset fall in raw material prices, tyre-makers are struggling to maintain their margins. Negative industry outlook is not exactly helping matters.

About 50% of industry’s inputs are currently imported. With the rupee weakening against the US dollar, the soaring import cost has emerged as the biggest concern, in contrast to this time last year, when rise in raw material prices unsettled the industry.

It appears the only silver lining in the past quarter has been the stable prices of raw materials, particularly of natural rubber.

Prices of rubber (which accounts for some 43% of total raw material costs) rose sharply in 2010-11, peaking in April at Rs240 per kg. They have, however, started to soften around Rs200 per kg now.

On the other hand, rupee has depreciated almost 20% since September. This is pressuring tyre-makers. And they are unable to pass on the pressure to others due to sluggish demand in the automobile industry.

“The depreciation of rupee has heavily impacted us. Whatever marginal gains we got due to the falling natural rubber prices has been nullified as our import cost shot up. Out of the total raw material used for making tyres, 50% is being imported currently,” said Ajay Sevekari, director, Bridgestone Tyres.

Uncertainty continues to dog the industry. The auto industry slowdown, particularly in the passenger car segment, has directly affected the tyre industry. Although the commercial vehicle (CV) segment is growing robustly, its after-market has slowed. All this has affected the pricing power of the major players in the industry.

“Despite steep increase in import cost, we are not in a position to absorb price hikes,” said Sevekari of Bridgestone.

“The demand in the (CV) after-market has dropped by 15% this year as compared to last year. Ban on mining in certain states has affected the after-market demand directly. All these factors do not allow us to take pricing action,” said Satish Sharma, chief, India operations, Apollo Tyres.

Till October in the current financial year, the tyre industry grew just about 6.5%. ATMA (All India Tyre Manufacturers’ Association) data suggest segments like passenger car tyres and CV tyres saw a dip in growth in September and October.

Many companies had focused on exports in order to offset weak domestic demand. Exports, however, seem to have taken a back seat now as domestic currencies of different countries are weakening.

“Export orders are currently kept on hold and payments are also coming. This has added to the concerns of tyre-makers. There is a lot of uncertainty and pressure in the market,” said
Rajiv Buddharaja, president, ATMA.

For tyre major Ceat, the year so far has been good on account of robust exports. “Our imports and exports are hedged. Till December(-end), we are comfortable as far as exports are concerned. Q4, however, looks tight as the (US) dollar is appreciating against many currencies. Exports can be a challenge going ahead,” said Arnab Banerjee, executive director – operations, Ceat.






Rubber Demand in China to Slow in 2012 as Auto Sales Decline, Okachi Says
Written by HMH | December 26, 2011 | 0 |





Natural rubber demand in China, the world’s largest consumer, may slow in 2012 and prices may extend the biggest annual decline in three years as economic growth and auto sales ease, an executive at Okachi & Co. said.

“There’s growing concern that the whole economic situation will face downward pressure in the first quarter next year because of weak economies in both emerging and developed countries,” said Lizhi Tang, president of Okachi’s greater China region. Okachi is the largest broker for rubber contracts on the Tokyo Commodity Exchange, he said.

Slower Chinese demand may extend a 33 percent decline in prices this year, the biggest drop since 2008, amid higher supply from producing countries including Thailand, and as the sovereign debt crisis in Europe deepens and growth in the U.S. slows.

“Growth in China’s demand for natural rubber next year is poised to slow down amid sluggish new auto sales,” Li Shiqiang, general manager at Sri Trang (Shanghai) Ltd. (STA), a unit of Thailand’s largest publicly traded rubber exporter, said in a phone interview on Dec. 22.

China’s economy will grow 8.5 percent next year, the least in 11 years, according to the Organization for Economic Cooperation and Development. Vehicle sales may rise by the least in 13 years in 2011, plunging from last year’s record 32 percent, according to the China Association of Automobile Manufacturers, as inflation, higher interest rates and the end of a two-year stimulus plan deter purchases.

The June-delivery contract advanced to as high as 281.5 yen a kilogram ($3,610 a ton), the highest level since Dec. 12, before trading at 278.5 yen on the Tokyo Commodity Exchange at 11:50 a.m. local time.

Tire Makers

“Chinese tire makers are confronting problems such as tight cash flow, declining sales, overcapacity, pressure to lower tire prices and consolidation,” Li at Sri Trang said. “Their situation will only improve if the whole economy turns up and the auto market recovers.”

Shares in Giti Tire Corp. (600182), China’s largest tiremaker, have dropped 30 percent this year in Shanghai and Double Coin Holdings (600623) has plunged 40 percent as auto sales have slowed. The benchmark Shanghai bourse has dropped 21 percent.

“Next year it’s likely that supply will outstrip demand because of a slowdown in the global economy and the subsequent weak demand from the auto and tire sectors,” He Yihua, a trading manager at Okachi, said in an e-mail.

The increasing use of substitute synthetic rubber will also lead to reduced use of the natural product, He said. Synthetic rubber may have reduced natural rubber consumption by about 545,000 tons in 2011, he said.

‘Weak Fundamentals’

“The weak fundamentals in the real estate market and other infrastructure sectors will also reduce the demand for tires in the logistics chain,” Sri Trang’s Li said. “So far there’s nothing to be optimistic about in 2012.”

China’s home prices posted their worst performance this year with more than half of the 70 biggest cities monitored in November recording declines after the government reiterated plans to maintain property curbs.

China’s inventory at bonded area in Qingdao, the country’s biggest spot rubber trading hub, climbed to record 270,000 tons to 280,000 tons last month, signallling sluggish demand, Okachi’s Tang said.

Natural rubber prices may fall further in the first quarter as the producing countries raise production, Tang said. Any “meaningful” rebound may appear in the second or the third quarter when producing countries may take measures to stem a decline in prices and a less restrictive monetary policy in China may stimulate the economy, Tang said.