Rubber prices set to head south next week

Rubber prices set to head south next week
June 9, 2012




Malaysian rubber prices are likely to ease next week as players are expected to stay on the sidelines in anticipation prices falling further.

A dealer said the market’s underlying fundamentals remained intact due to tight supply.

He said local rubber prices would also track the movements of regional rubber futures markets like the Tokyo Commodity Exchange and Singapore Commodity Exchange.

On a week-to-week basis, the Malaysian Rubber Board’s official physical noon price for tyre-grade SMR 20 fell 100 sen to 890 sen per kg from last Friday’s 990 sen.

Meanwhile, latex-in-bulk shed 36.5 sen to 668.5 sen per kg from 705 sen previously.

The unofficial closing price for tyre-grade SMR 20 declined 104.5 sen to 881.5 sen per kg while latex-in-bulk dropped 37.5 sen to 644 sen per kg. — BERNAMA






Philippines: Rubber farmers seek probe on falling prices
June 9, 2012




COTABATO CITY, Philippines – Owners of rubber farms in North Cotabato urged the Department of Agriculture on Friday to look into the continuing decline of prices of their products.

Datu Boy Imba, a senior official of the Free Rubber Tappers’ Association in the province, said rubber cup lumps, and processed, dried latex are bought by buyers for P48 a kilo, only half of last year’s buying price.

Imba said members of their organization suspect that a “powerful cartel” of traders engaged in marketing of rubber products is manipulating the procurement prices in the province.

“We know that there is a big demand for rubber products abroad yet we here are experiencing this situation now. The government should look into this,” Imba said.

Imba said local officials in the province are unable to answer why prices of rubber products are falling.

Most buyers of rubber products in the province are based in Makilala town. - John Unson






Rubber falls on excess supply, tepid demand
June 11, 2012




KOCHI: Natural rubber prices crashed last week on concerns of excess supply and lower demand. While a drop in global prices has made imports attractive despite rupee depreciation, tyre companies are worried over the sluggish demand in the automobile sector.

International prices of sheet rubber RSS 3, used by tyre companies, fell by Rs 12 in seven days ended June 8 to Rs 190 per kg. The price of block rubber SMR 20 too crashed by over Rs 20 to Rs 154 per kg in the global market, leading to a huge difference of Rs 36 between sheet and block rubber, which may prompt Indian tyre makers to import bigger volumes of block rubber.

According to a leading trader, the landed cost of block rubber, including duties and taxes, will come to around Rs 180 per kg at the present currency rate. This is less than the RSS-4 variety of sheet rubber used by the tyre industry in India. The price of the RSS 4 variety touched Rs 188 per kg on Friday, dropping by Rs 7 during the week.

“The cost of domestic rubber, after adding transportation charges and taxes, will be around Rs 203 per kg at the current prices,” said the trader. Unlike the overseas market, the difference between sheet and block rubber in India is just Rs 2 per kg. Block rubber costs Rs 186 per kg in India.

Though imports look attractive, tyre companies are not eager to enter into forward contracts, given the tepid demand situation. They don’t foresee a major improvement in demand this quarter as the fundamentals are weak. “Original equipment manufacturers are cutting down production because of a weak demand,” said Rajiv Budhraja, director general of Automotive Tyre Manufacturers Association.

Rubber production may not drop when rains intensify in the coming months because planters have put in place a good rain guard system in May. The rise in yield, coupled with sluggish demand and imports, could pull down domestic prices further.