Rubber prices to remain weak in 2012-13 on weak demand: Rubber Country
August 23, 2012
Fundamentals are not supportive of rubber as global production has risen in recent years while demand has fallen in major consuming countries. This is the reason why Thailand, Indonesia and Malaysia who account for 70% of global output have taken drastic measures in 2012 to stem the fall in prices.
KOCHI, INDIA (Commodity Online): Rubber prices in India have fallen steeply from a high of Rs 240 per kg for RSS 4 grade in 2011 to below Rs 170 per kg in August 2012 while rubber futures at Tokyo Commodity Exchange (TOCOM) have fallen to a 3-year low in early August to 209 Yen per kg before rebounding again.
Rubber prices are expected to remain weak for most of 2012-2013 on cyclical weakness, Eurozone debt crisis and slow down in China demand. But market could respond to stimulus measures and sustain above the lows set in 2012, according to Sreekumar Raghavan, Chief Commodity Strategist at Rubber Country (www.rubbercountry.com) a new portal from theCommodity Online Group.
Fundamentals are not supportive of rubber as global production has risen in recent years while demand has fallen in major consuming countries. This is the reason why Thailand, Indonesia and Malaysia who account for 70% of global output have taken drastic measures in 2012 to stem the fall in prices. It included procurement of rubber at prices above market levels and the recent decision to cut exports by 300,000 tonnes and cut aging trees to curtail 4,50,000 tonnes of production.
Global natural rubber production has risen from 6.6 mn tonnesi 1998 to 10.1 mn tonnes in 2008, 11 mn tonnes in 2011. Prodcution may rise further to 12.5 mn tonnes in 2013 and, 14.9 mn tonnes in 2014.
“High prices in recent years had prompted rubber producing countries to ramp up production and this is not unusual for cyclical crops like Rubber. Every 7-10 years rubber prices crash in response to higher production and rebounds again as demand picks up at lower levels,” Sreekumar Raghavan said.
In recent years, the boom-bust cycle has shortened due to certain global developments. In late 2008 rubber prices plummeted following the financial crisis but rebounded again in 2010 as drought conditions in Asia Pacific region resulted in lower production and sharp rise in prices.
The prices of natural rubber hit a record high of ¥528 a kilogram in February 2011 but crashed again in August 2012 to a low of 209 Yen as global manufacturing growth has weakened.
Rubber prices will continue to gain support from Asia-pacific demand mainly from China’s booming automotive, medical, heavy equipment and other industries. Higher crude oil prices are also supportive of natural rubber in the coming months. However, with global economic growth forecast for 2012 forecast at 3.5%, and 3.9% for 2013, rubber will have a challenging time ahead unless stimulus measures are in place to boost demand.
India Rubber Futures
At India’s National Multi Commodity Exchange (NMCE), October 2012 contract may rise to Rs 18100 per kg if prices don’t fall below Rs 15,900 in the near term. However, if prices go below that level, the resulting crash could see prices falling to Rs 12,000 levels, according to Rubber Country analysts. In spot market, rubber traders can start accumulating stock if in future prices are moving above Rs. 17250 per 100 kg, the analysts added.
“Rubber Country (www.rubber country.com), the newest portal from Commodity Online Group caters to the long felt need of the rubber traders and investors for reliable price information, latest news and analysis on the rubber industry worldwide,” George Iype, Managing Director, Commodity Online said.
Indian Rubber Industry urges duty free import
August 23, 2012
The association, its leaders, including AIRIA (SR) Chairman K. Vaidyalingam, had been asked by the government to submit data substantiating its appeal for an anti-dumping duty on imports of finished rubber products.
NEW DELHI (Commodity Online): Leaders of All-India Rubber Industries Association (AIRIA) urged the Central government to permit duty free import . Short fall in rubber production in India would be 75,000 tonnes this year said Vinod T. Simon president of All-India Rubber Industries Association (AIRIA). The fall in the production can be adjusted only through importing natural rubber said rubber association.
T.Simon added that the rubber industry was hit on account of high duty on import of inputs and low duty on finished products. And has urged duty free import.
How ever the rubber board agrees that there is a shortfall in production about 4 %. The industry estimates the growth in consumption would be 7.5-8 per cent.
The association, its leaders, including AIRIA (SR) Chairman K. Vaidyalingam, had been asked by the government to submit data substantiating its appeal for an anti-dumping duty on imports of finished rubber products.
Thursday, August 23, 2012
Wednesday, August 22, 2012
Tyre dealers demand price cuts as rubber prices drop
Tyre dealers demand price cuts as rubber prices drop
August 21, 2012
OEMs facing pressure on margins as costs continue to go up
As the tyre OEMs observe wait-and-watch mode due to continuing pressures, tyre dealers’ federation has demanded cut in prices of tyres on the back of fall in prices of natural rubber. While the federation seeks 18-20 per cent reduction in prices, rupee depreciation and high prices of imported crude derivates are reported to be limiting the scope of looking at price reduction for tyre OEMs.
“Now the natural rubber price is hovering at about Rs 174 per kg as against Rs 240 per kg in November 2010. Similarly, the prices of other petro-based raw materials are prevailing at the average rates of year 2008. Hence, there is a case for all the manufacturers to roll back the tyre prices in a pro-rata manner. During 2010-11, tyre prices across the board increased by 18-20 per cent and now the raw material prices pro-rata have come down steeply. However, domestic tyre majors are in no mood to pass on the benefit of lower cost of raw material to consumers. Reduction of tyre prices will result in lower road transport cost and in turn help tame inflation,” said S P Singh, convenor, All India Tyre Dealers’ Federation (AITDF) said.
“Tyre prices have not witnessed any reduction in the last quarter despite steady decline in crude and rubber prices. However, with rupee depreciating against dollar, prices of imported crude derivatives continue to be high. This coupled with the demand slowdown in the automotive industry has led tyre manufacturers to remain on a wait-and-watch mode,” Subrata Ray, senior vice-president corporate ratings, Icra told Financial Chronicle.
Meanwhile, OEMs have indicated that their costs continue to go up and are facing pressures on margins. “Average cost of raw materials in Q4FY12 was Rs 154 per kg, while in Q1FY13, it went up to Rs 159 per kg, registering a four per cent rise. Natural rubber, which started with Rs 100 per kg in FY10, went up to the level of Rs 245 per kg in FY12 and in Q1 of this financial year it was about Rs 193 per kg. Sequentially, synthetic rubber has gone up seven per cent and carbon black has also gone up 11 per cent in Q1. In July this year, raw material costs went up further,” pointed out tyre firms.
“Moreover, the increase in production of radial tyres in India resulted in manufacturers importing some better varieties of rubber. With the inverted duty structure and the fact that we are net importers, the depreciating rupee has also impacted us negatively,” they added.
However AITDF has stated that a five per cent reduction in natural rubber price would result in a strong double-digit rise in domestic Ebitda and there is a strong case for reduction in prices of tyres.
Icra’s Ray pointed out that during Q1FY13, the operating margins of some tyre companies witnessed improvement (YoY), largely supported by favourable rubber prices. Although natural rubber prices have been on a falling trend over the past eight to nine weeks, crude prices has started trending upwards again in the current quarter. This limits the tyre manufacturers’ ability to reduce tyre prices in proportion to the falling rubber prices. Also, in spite of some improvement in operating margin, the industry-wide profitability (RoCE) remains constrained by large investments underway, further limiting ability to lower prices.
Meanwhile, AITDF has sought government intervention for reduction of prices by 18-20 per cent. “This will save the hapless tyre dealers and road transporters. The domestic tyre industry is taking undue advantage by posting arbitrary and indiscriminate tyre prices due to delay in passing of final orders of cartelisation from Competition Commission of India,” it alleged.
India: Widening production-supply gap sees rubber imports increase
August 21, 2012
Production – Consumption mismatch is continuing in the natural rubber (NR) market and this in turn increases import to the country. According to the latest provisional estimates of the Rubber Board, production dropped 0.5 per cent in April – July period while consumption edged up 1.8 per cent.
During the period 238,700 tones were produced as against 240,000 tones in the same period of last financial year. While the cumulative figure of consumption is 330,250 tones as against 324,425 tones. Production of NR for the month of July, increased 2.6 per cent to 66,000 tones compared to 64,300 tones during July 2011. Consumption in July increased marginally at 0.6 per cent to 83,000 tones compared to 82,500 tones in the same month of last year.
It is significant to note that the supply – demand gap is widening in the domestic trade of rubber as in April- July period there was an overall shortage of 91,550 tones. In July alone the shortage was 17,000 tones. So the market is desperately in need of more rubber and now this being made up with import from South East Asian region.
The Board data said that 76,666 tones were imported during April -July period as against 60,461 tones that clearly indicates the shortage of rubber in the Indian market.
Onkar Kanwar, chairman, Apollo Tyres said: “There is serious shortage for natural rubber due to the slow pace in re-plantation and due to slow pace in the increase in acerage in fresh rubber plantations. Re-plantation is the urgent need of the day, otherwise industry has to depend more on imports.”
Companies like Apollo is now looking at taking over plantations in countries like Indonesia and Thailand on lease basis in order to carry on with their production, he added.
According to experts there was a marked increase in the demand for rubber during last decade thanks to capacity expansion and Greenfield plants of major tyre companies. But NR production is almost static, giving chance only for incremental increase. It is likely that India would have serious problems on the rubber front as the country require 1.5 million tones by 2015-16, while the production is likely to increase to a range of 1.1 million – 1.2 million tones, they added.
According to rubber board sources, India is having a comfortable stock and there will not be a serious shortage in the near future. The board now estimates a stock of 216,000 tones. So they discard the possibility of a crisis on the supply front. But industry sources said that the market is not having such a huge stock and the salable stock would not be over 100,000 tones which is sufficient just for one month. So the market will be on a deep crisis unless, there is serious effort to increase production.
Because of the lower price tags in the global market, the rubber based industries, especially the tyre sector, opts for imports.
The better quality of imported rubber also adds value to the imports, imported rubber is more suitable for the manufacture of radial tyres, said Satish Sharma, Chief, India Operations, Apollo Tyres. During the year 2011-12 India imported 205,050 tones as against 188,387 tones in 2010-11. As per the current pace, import is likely to cross 250,000 tones at the end of March, 2013.
Spot rubber slips on buyer resistance
August 21, 2012
KOTTAYAM, AUG. 21:
Rubber market showed a mixed trendon Tuesday. In spot, prices slipped on buyer resistance and the overall sentiments were still bearish. Leading grades failed to sustain at higher levels as there was no follow up buying from major consuming industries.
Sheet rubber weakened to Rs 170 (171) a kg both at Kottayam and Kochi, according to traders and the Rubber Board. In futures, the September series closed at Rs 168.70 (169.57), October at Rs 167.50 (168.16), November at Rs 167 (166.99) and December at Rs 167.50 (167.62) a kg on the National Multi Commodity Exchange.
RSS 3 (spot) dropped to Rs 154.77 (155.05) a kg at Bangkok. The August futures improved to ¥213.5 (Rs 149.15) from ¥212 a kg during the day session and then to ¥215 (Rs 150.19) in the night session on the Tokyo Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 170 (171); RSS-5: 160 (163); ungraded: 153 (155); ISNR 20: 150 (150) and latex 60 per cent: 113 (113).
Rubber growers demand help on falling rubber prices
August 21, 2012
SONGKHLA, Aug 20 – Thailand’s rubber growers network from 14 southern provinces converged on Songkhla provincial hall on Monday afternoon to press the government for help to shore up falling natural rubber prices.
Police were deployed to ensure law and order around the provincial hall while the growers gathered to demand government intervention on falling rubber prices.
Growers said they have asked for government help many times since January but until now there has been no progress.
They said the raw rubber sheet price has fallen to Bt70 per kilogramme, and they wanted to see the price stay at Bt120 per kilogramme.
The network used a truck with loud speakers as their makeshift stage to attack government measures to resolve the price problem.
They planned to submit a letter to Prime Minister Yingluck Shinawatra asking her to issue meaningful actions to help the growers and remove those who have caused the problem.
Meanwhile, in Ranong, some 100 rubber growers gathered at the Office of the Rubber Replanting Aid Fund (ORRAF) to demand its urgent coordination with agencies concerned to deal with the falling rubber price problem.
The group threatened to carry their protest to Bangkok to demand the government shore up the rubber price to at least Bt120 per kilogramme.
August 21, 2012
OEMs facing pressure on margins as costs continue to go up
As the tyre OEMs observe wait-and-watch mode due to continuing pressures, tyre dealers’ federation has demanded cut in prices of tyres on the back of fall in prices of natural rubber. While the federation seeks 18-20 per cent reduction in prices, rupee depreciation and high prices of imported crude derivates are reported to be limiting the scope of looking at price reduction for tyre OEMs.
“Now the natural rubber price is hovering at about Rs 174 per kg as against Rs 240 per kg in November 2010. Similarly, the prices of other petro-based raw materials are prevailing at the average rates of year 2008. Hence, there is a case for all the manufacturers to roll back the tyre prices in a pro-rata manner. During 2010-11, tyre prices across the board increased by 18-20 per cent and now the raw material prices pro-rata have come down steeply. However, domestic tyre majors are in no mood to pass on the benefit of lower cost of raw material to consumers. Reduction of tyre prices will result in lower road transport cost and in turn help tame inflation,” said S P Singh, convenor, All India Tyre Dealers’ Federation (AITDF) said.
“Tyre prices have not witnessed any reduction in the last quarter despite steady decline in crude and rubber prices. However, with rupee depreciating against dollar, prices of imported crude derivatives continue to be high. This coupled with the demand slowdown in the automotive industry has led tyre manufacturers to remain on a wait-and-watch mode,” Subrata Ray, senior vice-president corporate ratings, Icra told Financial Chronicle.
Meanwhile, OEMs have indicated that their costs continue to go up and are facing pressures on margins. “Average cost of raw materials in Q4FY12 was Rs 154 per kg, while in Q1FY13, it went up to Rs 159 per kg, registering a four per cent rise. Natural rubber, which started with Rs 100 per kg in FY10, went up to the level of Rs 245 per kg in FY12 and in Q1 of this financial year it was about Rs 193 per kg. Sequentially, synthetic rubber has gone up seven per cent and carbon black has also gone up 11 per cent in Q1. In July this year, raw material costs went up further,” pointed out tyre firms.
“Moreover, the increase in production of radial tyres in India resulted in manufacturers importing some better varieties of rubber. With the inverted duty structure and the fact that we are net importers, the depreciating rupee has also impacted us negatively,” they added.
However AITDF has stated that a five per cent reduction in natural rubber price would result in a strong double-digit rise in domestic Ebitda and there is a strong case for reduction in prices of tyres.
Icra’s Ray pointed out that during Q1FY13, the operating margins of some tyre companies witnessed improvement (YoY), largely supported by favourable rubber prices. Although natural rubber prices have been on a falling trend over the past eight to nine weeks, crude prices has started trending upwards again in the current quarter. This limits the tyre manufacturers’ ability to reduce tyre prices in proportion to the falling rubber prices. Also, in spite of some improvement in operating margin, the industry-wide profitability (RoCE) remains constrained by large investments underway, further limiting ability to lower prices.
Meanwhile, AITDF has sought government intervention for reduction of prices by 18-20 per cent. “This will save the hapless tyre dealers and road transporters. The domestic tyre industry is taking undue advantage by posting arbitrary and indiscriminate tyre prices due to delay in passing of final orders of cartelisation from Competition Commission of India,” it alleged.
India: Widening production-supply gap sees rubber imports increase
August 21, 2012
Production – Consumption mismatch is continuing in the natural rubber (NR) market and this in turn increases import to the country. According to the latest provisional estimates of the Rubber Board, production dropped 0.5 per cent in April – July period while consumption edged up 1.8 per cent.
During the period 238,700 tones were produced as against 240,000 tones in the same period of last financial year. While the cumulative figure of consumption is 330,250 tones as against 324,425 tones. Production of NR for the month of July, increased 2.6 per cent to 66,000 tones compared to 64,300 tones during July 2011. Consumption in July increased marginally at 0.6 per cent to 83,000 tones compared to 82,500 tones in the same month of last year.
It is significant to note that the supply – demand gap is widening in the domestic trade of rubber as in April- July period there was an overall shortage of 91,550 tones. In July alone the shortage was 17,000 tones. So the market is desperately in need of more rubber and now this being made up with import from South East Asian region.
The Board data said that 76,666 tones were imported during April -July period as against 60,461 tones that clearly indicates the shortage of rubber in the Indian market.
Onkar Kanwar, chairman, Apollo Tyres said: “There is serious shortage for natural rubber due to the slow pace in re-plantation and due to slow pace in the increase in acerage in fresh rubber plantations. Re-plantation is the urgent need of the day, otherwise industry has to depend more on imports.”
Companies like Apollo is now looking at taking over plantations in countries like Indonesia and Thailand on lease basis in order to carry on with their production, he added.
According to experts there was a marked increase in the demand for rubber during last decade thanks to capacity expansion and Greenfield plants of major tyre companies. But NR production is almost static, giving chance only for incremental increase. It is likely that India would have serious problems on the rubber front as the country require 1.5 million tones by 2015-16, while the production is likely to increase to a range of 1.1 million – 1.2 million tones, they added.
According to rubber board sources, India is having a comfortable stock and there will not be a serious shortage in the near future. The board now estimates a stock of 216,000 tones. So they discard the possibility of a crisis on the supply front. But industry sources said that the market is not having such a huge stock and the salable stock would not be over 100,000 tones which is sufficient just for one month. So the market will be on a deep crisis unless, there is serious effort to increase production.
Because of the lower price tags in the global market, the rubber based industries, especially the tyre sector, opts for imports.
The better quality of imported rubber also adds value to the imports, imported rubber is more suitable for the manufacture of radial tyres, said Satish Sharma, Chief, India Operations, Apollo Tyres. During the year 2011-12 India imported 205,050 tones as against 188,387 tones in 2010-11. As per the current pace, import is likely to cross 250,000 tones at the end of March, 2013.
Spot rubber slips on buyer resistance
August 21, 2012
KOTTAYAM, AUG. 21:
Rubber market showed a mixed trendon Tuesday. In spot, prices slipped on buyer resistance and the overall sentiments were still bearish. Leading grades failed to sustain at higher levels as there was no follow up buying from major consuming industries.
Sheet rubber weakened to Rs 170 (171) a kg both at Kottayam and Kochi, according to traders and the Rubber Board. In futures, the September series closed at Rs 168.70 (169.57), October at Rs 167.50 (168.16), November at Rs 167 (166.99) and December at Rs 167.50 (167.62) a kg on the National Multi Commodity Exchange.
RSS 3 (spot) dropped to Rs 154.77 (155.05) a kg at Bangkok. The August futures improved to ¥213.5 (Rs 149.15) from ¥212 a kg during the day session and then to ¥215 (Rs 150.19) in the night session on the Tokyo Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 170 (171); RSS-5: 160 (163); ungraded: 153 (155); ISNR 20: 150 (150) and latex 60 per cent: 113 (113).
Rubber growers demand help on falling rubber prices
August 21, 2012
SONGKHLA, Aug 20 – Thailand’s rubber growers network from 14 southern provinces converged on Songkhla provincial hall on Monday afternoon to press the government for help to shore up falling natural rubber prices.
Police were deployed to ensure law and order around the provincial hall while the growers gathered to demand government intervention on falling rubber prices.
Growers said they have asked for government help many times since January but until now there has been no progress.
They said the raw rubber sheet price has fallen to Bt70 per kilogramme, and they wanted to see the price stay at Bt120 per kilogramme.
The network used a truck with loud speakers as their makeshift stage to attack government measures to resolve the price problem.
They planned to submit a letter to Prime Minister Yingluck Shinawatra asking her to issue meaningful actions to help the growers and remove those who have caused the problem.
Meanwhile, in Ranong, some 100 rubber growers gathered at the Office of the Rubber Replanting Aid Fund (ORRAF) to demand its urgent coordination with agencies concerned to deal with the falling rubber price problem.
The group threatened to carry their protest to Bangkok to demand the government shore up the rubber price to at least Bt120 per kilogramme.
Tuesday, August 21, 2012
Rubber Seen Dropping as Chinese Inventories May Equal Record
Rubber Seen Dropping as Chinese Inventories May Equal Record
Aug 20, 2012: Rubber is poised to drop as sustained supplies from Southeast Asia and falling demand from China’s tiremakers push stockpiles to match their record at Qingdao port, the main shipment hub, an industry executive said. Futures fell for the first time in four days.
Inventories in the bonded zone, where traders store deliveries before paying duties, will probably climb to 250,000 metric tons by end-August from 240,000 tons last week, Li Xiangou, chairman at the Qingdao International Rubber Exchange Market, said in an Aug. 17 interview. China accounts for 33 percent of global demand and tires represent 70 percent of natural-rubber consumption in the country. Reserves last reached 250,000 tons in mid-January, he said.
Rubber traded in Tokyo has plunged 59 percent from a record in February 2011, cutting costs for tire makers such as Bridgestone Corp. (5108), Goodyear Tire & Rubber Co. (GT) and Michelin & Cie as the economy slowed in China, the world’s largest auto market, and Europe struggled to contain its debt crisis. Thailand, Indonesia and Malaysia, the top three shippers, agreed to cut exports by 300,000 tons in a bid to boost prices.
So far there’s no bright spot in the local rubber market wherever you look, said Li. Demand is dropping due to a weak auto market while shipments from Southeast Asia are streaming in at the usual pace. Prices may drop further this month and in September, he said.
The northeastern port of Qingdao is in Shandong province, which produces about half of China’s tire output, according to data compiled by Sri Trang Agro-Industry Pcl (STA), Thailand’s largest publicly traded rubber exporter.
‘Too Pessimistic’
Rubber for January delivery fell as much as 1.8 percent to 217 yen a kilogram ($2,730 a ton) before settling at 219.40 yen today. That follows a three-day gain of 6.5 percent. Futures reached a record 535.7 yen on Feb. 18 last year and dropped to the lowest level since October 2009 on Aug. 14.
One can be too pessimistic these days after the recent sell off, Li Shiqiang, general manager at the China unit of Sri Trang Agro, said in Qingdao Aug. 17. Once sentiment recovers, tiremakers will replenish their inventories, boosting demand, and a sharp fall in prices will also trigger government actions in producing countries.
Thailand, Indonesia and Malaysia, which represent about 70 percent of global supplies, plan to cut down aging trees across 100,000 hectares (247,105 acres). The move, combined with the export cut, will remove 450,000 tons from the market, the International Tripartite Rubber Council, which represents state agencies and exporters, said in a statement Aug. 16.
‘Bear Market’
The increase in Qingdao stockpiles is partly because Thai shippers reduced direct sales to some Chinese buyers because of contract difficulties and prefer to store supplies at warehouses there instead, according to Pongsak Kerdvongbundit, honorary president of the Thai Rubber Association. They deliver to customers once they receive payment, he said.
We are in the long painful process of a bear market due to the global economic recession, Tang Lizhi, president for the China region at Okachi (Shanghai) Co., the unit of the largest rubber broker on Tocom. The bear market will last for a while, with a sporadic rebound along the way whenever China cuts interest rates or reduces banks’ reserve requirements.
Potential Stimulus
Governments from the U.S. to China may take new measures to stimulate growth, boosting demand for commodities. Premier Wen Jiabao said easing inflation provides room to adjust monetary policy, state television reported last week. Federal Reserve Chairman Ben S. Bernanke may talk about monetary options at a conference in Jackson Hole, Wyoming, at the end of the month. Chancellor Angela Merkel has signaled Germany’s support for a European Central Bank plan to resolve the region’s debt crisis.
Rubber may find a bottom in the fourth quarter after the U.S. presidential election and China’s party congress, said Li of the Qingdao International Rubber Exchange Market.
China’s economy expanded 7.6 percent in the second quarter from a year ago, the slowest pace in three years. Truck sales fell 10 percent in July from a month earlier, China Automotive Information Network data show. Passenger-vehicle sales trailed analysts’ estimates for the first time in five months.
Many Chinese tire makers are mired in high inventories of end-products right now, Li said. They have moderated their raw material purchases.
Warehouses ‘Full’
Declining truck sales and slowing growth will cut demand for heavy-duty tires, reducing total natural-rubber demand by 5 percent this year, according to Shen Jinrong, chairman at the biggest tiremaker Hangzhou Zhongce Rubber Co. A tire for a medium to heavy commercial vehicle uses as much as 18 kilograms (40 pounds) of natural rubber on average, compared with less than 1 kilogram for a passenger car, according to Jeremie Capron, an analyst at CLSA Asia-Pacific Markets in Singapore.
The warehouses are so full that the dealers are dumping the new shipments at a discount to the tire factories because they can’t find storage for them, Li said. I think the year- on-year reduction will be more than the 5 percent estimated by Zhongce, he said, without giving an exact figure.
Global natural-rubber supply will exceed demand for a third year in 2013, according to RCMA Commodities Asia Group in Singapore. Production will top usage by 299,000 tons, from a surplus of 321,000 tons this year and 4,000 tons in 2011, according to Chief Executive Officer Chris Pardey, a former commodities trader at Cargill Inc. and Noble Group Ltd.
Consumption may rise 2.5 percent to 11.2 million tons in 2012 as output grows 3.2 percent to 11.3 million tons, the International Rubber Study Group said last month. Demand will probably climb 4.3 percent to 11.7 million tons next year as production gains 4.4 percent to 11.8 million tons, it said.
(Source: Bloomberg)
Thailand plans $476 mln more for rubber intervention
BANGKOK, Aug 21 - Thailand, the world's biggest rubber producer and exporter, could spend another 15 billion baht ($476 million) on rubber intervention after failing to lift prices with its buying so far, Deputy Agriculture Minister said on Tuesday.
"We expect to submit a plan to spend another 15 billion baht for cabinet approval next week or immediately, this week," Deputy Agriculture Minister Nattawut Saikuar told Reuters.
The government had also earmarked 15 billion baht for the initial intervention scheme. Nattawut said the government had bought around 80,000 tonnes of rubber sheets from farmers since the programme was fully implemented in May.
($1 = 31.5250 Thai baht)
(Source: Reuters)
Aug 20, 2012: Rubber is poised to drop as sustained supplies from Southeast Asia and falling demand from China’s tiremakers push stockpiles to match their record at Qingdao port, the main shipment hub, an industry executive said. Futures fell for the first time in four days.
Inventories in the bonded zone, where traders store deliveries before paying duties, will probably climb to 250,000 metric tons by end-August from 240,000 tons last week, Li Xiangou, chairman at the Qingdao International Rubber Exchange Market, said in an Aug. 17 interview. China accounts for 33 percent of global demand and tires represent 70 percent of natural-rubber consumption in the country. Reserves last reached 250,000 tons in mid-January, he said.
Rubber traded in Tokyo has plunged 59 percent from a record in February 2011, cutting costs for tire makers such as Bridgestone Corp. (5108), Goodyear Tire & Rubber Co. (GT) and Michelin & Cie as the economy slowed in China, the world’s largest auto market, and Europe struggled to contain its debt crisis. Thailand, Indonesia and Malaysia, the top three shippers, agreed to cut exports by 300,000 tons in a bid to boost prices.
So far there’s no bright spot in the local rubber market wherever you look, said Li. Demand is dropping due to a weak auto market while shipments from Southeast Asia are streaming in at the usual pace. Prices may drop further this month and in September, he said.
The northeastern port of Qingdao is in Shandong province, which produces about half of China’s tire output, according to data compiled by Sri Trang Agro-Industry Pcl (STA), Thailand’s largest publicly traded rubber exporter.
‘Too Pessimistic’
Rubber for January delivery fell as much as 1.8 percent to 217 yen a kilogram ($2,730 a ton) before settling at 219.40 yen today. That follows a three-day gain of 6.5 percent. Futures reached a record 535.7 yen on Feb. 18 last year and dropped to the lowest level since October 2009 on Aug. 14.
One can be too pessimistic these days after the recent sell off, Li Shiqiang, general manager at the China unit of Sri Trang Agro, said in Qingdao Aug. 17. Once sentiment recovers, tiremakers will replenish their inventories, boosting demand, and a sharp fall in prices will also trigger government actions in producing countries.
Thailand, Indonesia and Malaysia, which represent about 70 percent of global supplies, plan to cut down aging trees across 100,000 hectares (247,105 acres). The move, combined with the export cut, will remove 450,000 tons from the market, the International Tripartite Rubber Council, which represents state agencies and exporters, said in a statement Aug. 16.
‘Bear Market’
The increase in Qingdao stockpiles is partly because Thai shippers reduced direct sales to some Chinese buyers because of contract difficulties and prefer to store supplies at warehouses there instead, according to Pongsak Kerdvongbundit, honorary president of the Thai Rubber Association. They deliver to customers once they receive payment, he said.
We are in the long painful process of a bear market due to the global economic recession, Tang Lizhi, president for the China region at Okachi (Shanghai) Co., the unit of the largest rubber broker on Tocom. The bear market will last for a while, with a sporadic rebound along the way whenever China cuts interest rates or reduces banks’ reserve requirements.
Potential Stimulus
Governments from the U.S. to China may take new measures to stimulate growth, boosting demand for commodities. Premier Wen Jiabao said easing inflation provides room to adjust monetary policy, state television reported last week. Federal Reserve Chairman Ben S. Bernanke may talk about monetary options at a conference in Jackson Hole, Wyoming, at the end of the month. Chancellor Angela Merkel has signaled Germany’s support for a European Central Bank plan to resolve the region’s debt crisis.
Rubber may find a bottom in the fourth quarter after the U.S. presidential election and China’s party congress, said Li of the Qingdao International Rubber Exchange Market.
China’s economy expanded 7.6 percent in the second quarter from a year ago, the slowest pace in three years. Truck sales fell 10 percent in July from a month earlier, China Automotive Information Network data show. Passenger-vehicle sales trailed analysts’ estimates for the first time in five months.
Many Chinese tire makers are mired in high inventories of end-products right now, Li said. They have moderated their raw material purchases.
Warehouses ‘Full’
Declining truck sales and slowing growth will cut demand for heavy-duty tires, reducing total natural-rubber demand by 5 percent this year, according to Shen Jinrong, chairman at the biggest tiremaker Hangzhou Zhongce Rubber Co. A tire for a medium to heavy commercial vehicle uses as much as 18 kilograms (40 pounds) of natural rubber on average, compared with less than 1 kilogram for a passenger car, according to Jeremie Capron, an analyst at CLSA Asia-Pacific Markets in Singapore.
The warehouses are so full that the dealers are dumping the new shipments at a discount to the tire factories because they can’t find storage for them, Li said. I think the year- on-year reduction will be more than the 5 percent estimated by Zhongce, he said, without giving an exact figure.
Global natural-rubber supply will exceed demand for a third year in 2013, according to RCMA Commodities Asia Group in Singapore. Production will top usage by 299,000 tons, from a surplus of 321,000 tons this year and 4,000 tons in 2011, according to Chief Executive Officer Chris Pardey, a former commodities trader at Cargill Inc. and Noble Group Ltd.
Consumption may rise 2.5 percent to 11.2 million tons in 2012 as output grows 3.2 percent to 11.3 million tons, the International Rubber Study Group said last month. Demand will probably climb 4.3 percent to 11.7 million tons next year as production gains 4.4 percent to 11.8 million tons, it said.
(Source: Bloomberg)
Thailand plans $476 mln more for rubber intervention
BANGKOK, Aug 21 - Thailand, the world's biggest rubber producer and exporter, could spend another 15 billion baht ($476 million) on rubber intervention after failing to lift prices with its buying so far, Deputy Agriculture Minister said on Tuesday.
"We expect to submit a plan to spend another 15 billion baht for cabinet approval next week or immediately, this week," Deputy Agriculture Minister Nattawut Saikuar told Reuters.
The government had also earmarked 15 billion baht for the initial intervention scheme. Nattawut said the government had bought around 80,000 tonnes of rubber sheets from farmers since the programme was fully implemented in May.
($1 = 31.5250 Thai baht)
(Source: Reuters)
Friday, August 17, 2012
Tyre grade rises after export cuts by top rubber producers
Tyre grade rises after export cuts by top rubber producers
* SIR20 up more than 3 pct, SMR20 rallies on export cuts
* Thai grades untraded, prices firm
* Producers to cut exports by 300,000 T this year
SINGAPORE, Aug 17 - Indonesian rubber changed hands at a price as high as 113.50 U.S. cents a pound ($2.50/kg), up 3.6 percent from earlier this week, after Tokyo futures rallied on the latest plan by top producers to cut exports this year, dealers said on Friday.
Malaysian rubber jumped more than 5 percent, trading as high as $2.64 a kg, from $2.50 late on Tuesday. Thai RSS3 and STR20 were untraded but the grades also firmed after Thailand, Indonesia and Malaysia decided to curb supply to shore up slumping global prices.
"The reaction from the market is very strong, but we still need time to see what the action is. That is more important," said a dealer in Singapore.
"They need to have enough budget to do it," said the dealer, adding that the three producers would have to buy rubber from domestic markets before eventually selling the commodity in the future.
Thailand, Indonesia and Malaysia on Thursday announced the new measures, which will cut supply by up to 450,000 tonnes, which is similar to a move in 2008 to slash exports by more than 900,000 tonnes. The three countries account for 70 percent of global output.
The most active rubber contract on the Tokyo Commodity Exchange, January extended gains on Friday and rallied 6 percent to a high of 224.8 yen a kg on the export cut news and after German Chancellor Angela Merkel gave her support to efforts to resolve the euro crisis.
The contract had plunged to its weakest in nearly three years this week on worries about the health of the global economy, dragging down the price of tyre grades.
Indonesian SIR20 was traded late on Thursday at 111.25, 111.50 to 113.50 U.S. cents a pound for October/November delivery, higher than 109.50 cents transacted late on Tuesday.
There were no reports of deals for Thai RSS3, which was offered at $2.75 a kg on Friday. The grade was traded at $2.60 a kg earlier this week -- well below a lifetime high of $6.40 a kg in February 2011.
"TOCOM has rebounded and then everything goes up. It's typical. This is what the governments want. We have seen this action before and we don't know if this rally will last or not," said a dealer in Kuala Lumpur.
Fears of defaults have gripped the rubber market this week as tyre grades tumbled after price-setting Tokyo futures slipped to their weakest since late 2009.
Though some tyre grades are still being sold to top consumer China, the hefty drop in prices in recent months has caused anxiety among sellers, who were forced to renegotiate contracts with Chinese buyers late last year.
(Source: Reuters)
* SIR20 up more than 3 pct, SMR20 rallies on export cuts
* Thai grades untraded, prices firm
* Producers to cut exports by 300,000 T this year
SINGAPORE, Aug 17 - Indonesian rubber changed hands at a price as high as 113.50 U.S. cents a pound ($2.50/kg), up 3.6 percent from earlier this week, after Tokyo futures rallied on the latest plan by top producers to cut exports this year, dealers said on Friday.
Malaysian rubber jumped more than 5 percent, trading as high as $2.64 a kg, from $2.50 late on Tuesday. Thai RSS3 and STR20 were untraded but the grades also firmed after Thailand, Indonesia and Malaysia decided to curb supply to shore up slumping global prices.
"The reaction from the market is very strong, but we still need time to see what the action is. That is more important," said a dealer in Singapore.
"They need to have enough budget to do it," said the dealer, adding that the three producers would have to buy rubber from domestic markets before eventually selling the commodity in the future.
Thailand, Indonesia and Malaysia on Thursday announced the new measures, which will cut supply by up to 450,000 tonnes, which is similar to a move in 2008 to slash exports by more than 900,000 tonnes. The three countries account for 70 percent of global output.
The most active rubber contract on the Tokyo Commodity Exchange, January extended gains on Friday and rallied 6 percent to a high of 224.8 yen a kg on the export cut news and after German Chancellor Angela Merkel gave her support to efforts to resolve the euro crisis.
The contract had plunged to its weakest in nearly three years this week on worries about the health of the global economy, dragging down the price of tyre grades.
Indonesian SIR20 was traded late on Thursday at 111.25, 111.50 to 113.50 U.S. cents a pound for October/November delivery, higher than 109.50 cents transacted late on Tuesday.
There were no reports of deals for Thai RSS3, which was offered at $2.75 a kg on Friday. The grade was traded at $2.60 a kg earlier this week -- well below a lifetime high of $6.40 a kg in February 2011.
"TOCOM has rebounded and then everything goes up. It's typical. This is what the governments want. We have seen this action before and we don't know if this rally will last or not," said a dealer in Kuala Lumpur.
Fears of defaults have gripped the rubber market this week as tyre grades tumbled after price-setting Tokyo futures slipped to their weakest since late 2009.
Though some tyre grades are still being sold to top consumer China, the hefty drop in prices in recent months has caused anxiety among sellers, who were forced to renegotiate contracts with Chinese buyers late last year.
(Source: Reuters)
Tuesday, August 14, 2012
Tokyo futures drop near 3-year low on demand fears (Aug 13)
Tokyo futures drop near 3-year low on demand fears (Aug 13)
August 13, 2012
SINGAPORE, Aug 13 (Reuters) – Tokyo rubber futures fell to their weakest in nearly three years on Monday on worries about slowing demand and the debt crisis in Europe, while losses in China’s equity market helped push Shanghai futures to a contract low.
The most-active Tokyo Commodity Exchange rubber contract for January delivery settled down 5.0 yen a kg at 213.9 yen, its weakest since October 2009, after earlier hitting an intraday high of 219.3 yen.
“Even though oil prices are high, the rubber market is technically week. If it breaks the 200 yen support level, then I think things will look bad,” said a dealer in Kuala Lumpur.
“Nobody is chasing rubber because people think prices could fall again.”
Oil, which often influences TOCOM contracts, firmed on Monday, with Brent rising above $114 per barrel to its highest in more than three months, as Israeli comments on stopping Iran from proceeding with a disputed nuclear programme stoked worries about a disruption in supplies from the region.
Weaker TOCOM and declines in Shanghai shares weighed on the rubber market in China. The most-active rubber contract on the Shanghai Futures Exchange for January delivery slipped more than 3 percent to a contract low of 21,590 yuan a tonne.
Chinese imports of key commodities, such as iron ore and copper, held up better than expected in July, but weak trade figures and a nine-month low in crude oil imports painted a picture of a slowing economy.
Shanghai shares suffered their worst daily loss in nearly a month on Monday, dragged down by steep losses in shares in Chinese brokerages.
In other markets, weak Japanese economic data tempered European investors’ optimism about ECB plans to tackle the euro zone crisis, with stocks down slightly and the euro flat.
The front-month September rubber contract on Singapore’s SICOM exchange was last traded at 250.5 U.S. cents per kg, down 8.70 cents.
India Rubber prices hit 21 month low on weak demand
August 12, 2012
KOTTAYAM, INDIA (Commodity Online): Rubber prices in India recorded a sharp fall in prices in recent months as industrial growth has slowed down due global financial crisis.
In the physical market, RSS 4 grade rubber prices are at 21- month low due to economic slowdown, weak monsoon which keeps rubber market under pressure.
NMCE rubber futures have shown weak performance with the most active September rubber futures hitting weakest level since September 2010 shedding nearly three per cent.
Sheet rubber recorded a decline in its prices from Rs.177 to Rs. 175.50 per kg. The grade rubber prices are also fell to Rs.176 from 177.50 per kg as reported by the rubber board.
In the National Multi Commodity Exchange August series improved to Rs. 173.50 (173.02) and September to Rs. 167.90 (167.64) while the October series dropped to Rs. 167.52 (167.65), November to Rs. 167.25 (168.51) and December to Rs. 171.64 (178.79).
India: As economy slides, truck sales enter slow lane
August 12, 2012
Domestic truck sales seem to be mirroring the current slowdown. Thanks to slow industrial activity and goods movement, medium and heavy truck sales have fallen 18% to 71,456 so far in the current fiscal year. Fearing a further decline in demand, manufacturers have also slashed production by 27% to 74,000 during the April-July period.
Market leader Tata Motors seemed to be the worst hit, with its medium and heavy commercial vehicle sales falling 22% during the period.
“The low GDP rate is one reason,” said Ravi Pisharody, executive director, Tata Motors. “Certain sectors are facing challenges. For instance, the mining sector is in a standstill, affecting truck sales in a big way.”
With goods movement also decreasing, truck rentals have gone down by as much as 11-13% in the current fiscal year.
This has resulted in truck operators turning away from dealers despite discounts of up to Rs. 2.5 lakh and finance schemes offering 5.5-6.5% interest rate, said SP Singh, co-ordinator, Indian Foundation of Transport Research & Training.
“If the freight market does not improve, there is possibility of repossession of delinquent trucks,” he said.
During the downturn in 2008-09, more than 40000 trucks were repossessed for non payment of loan by fleet owners.
August 13, 2012
SINGAPORE, Aug 13 (Reuters) – Tokyo rubber futures fell to their weakest in nearly three years on Monday on worries about slowing demand and the debt crisis in Europe, while losses in China’s equity market helped push Shanghai futures to a contract low.
The most-active Tokyo Commodity Exchange rubber contract for January delivery settled down 5.0 yen a kg at 213.9 yen, its weakest since October 2009, after earlier hitting an intraday high of 219.3 yen.
“Even though oil prices are high, the rubber market is technically week. If it breaks the 200 yen support level, then I think things will look bad,” said a dealer in Kuala Lumpur.
“Nobody is chasing rubber because people think prices could fall again.”
Oil, which often influences TOCOM contracts, firmed on Monday, with Brent rising above $114 per barrel to its highest in more than three months, as Israeli comments on stopping Iran from proceeding with a disputed nuclear programme stoked worries about a disruption in supplies from the region.
Weaker TOCOM and declines in Shanghai shares weighed on the rubber market in China. The most-active rubber contract on the Shanghai Futures Exchange for January delivery slipped more than 3 percent to a contract low of 21,590 yuan a tonne.
Chinese imports of key commodities, such as iron ore and copper, held up better than expected in July, but weak trade figures and a nine-month low in crude oil imports painted a picture of a slowing economy.
Shanghai shares suffered their worst daily loss in nearly a month on Monday, dragged down by steep losses in shares in Chinese brokerages.
In other markets, weak Japanese economic data tempered European investors’ optimism about ECB plans to tackle the euro zone crisis, with stocks down slightly and the euro flat.
The front-month September rubber contract on Singapore’s SICOM exchange was last traded at 250.5 U.S. cents per kg, down 8.70 cents.
India Rubber prices hit 21 month low on weak demand
August 12, 2012
KOTTAYAM, INDIA (Commodity Online): Rubber prices in India recorded a sharp fall in prices in recent months as industrial growth has slowed down due global financial crisis.
In the physical market, RSS 4 grade rubber prices are at 21- month low due to economic slowdown, weak monsoon which keeps rubber market under pressure.
NMCE rubber futures have shown weak performance with the most active September rubber futures hitting weakest level since September 2010 shedding nearly three per cent.
Sheet rubber recorded a decline in its prices from Rs.177 to Rs. 175.50 per kg. The grade rubber prices are also fell to Rs.176 from 177.50 per kg as reported by the rubber board.
In the National Multi Commodity Exchange August series improved to Rs. 173.50 (173.02) and September to Rs. 167.90 (167.64) while the October series dropped to Rs. 167.52 (167.65), November to Rs. 167.25 (168.51) and December to Rs. 171.64 (178.79).
India: As economy slides, truck sales enter slow lane
August 12, 2012
Domestic truck sales seem to be mirroring the current slowdown. Thanks to slow industrial activity and goods movement, medium and heavy truck sales have fallen 18% to 71,456 so far in the current fiscal year. Fearing a further decline in demand, manufacturers have also slashed production by 27% to 74,000 during the April-July period.
Market leader Tata Motors seemed to be the worst hit, with its medium and heavy commercial vehicle sales falling 22% during the period.
“The low GDP rate is one reason,” said Ravi Pisharody, executive director, Tata Motors. “Certain sectors are facing challenges. For instance, the mining sector is in a standstill, affecting truck sales in a big way.”
With goods movement also decreasing, truck rentals have gone down by as much as 11-13% in the current fiscal year.
This has resulted in truck operators turning away from dealers despite discounts of up to Rs. 2.5 lakh and finance schemes offering 5.5-6.5% interest rate, said SP Singh, co-ordinator, Indian Foundation of Transport Research & Training.
“If the freight market does not improve, there is possibility of repossession of delinquent trucks,” he said.
During the downturn in 2008-09, more than 40000 trucks were repossessed for non payment of loan by fleet owners.
Thursday, August 9, 2012
Rubber board to crack the whip on smugglers
Rubber board to crack the whip on smugglers
TNN | Aug 10, 2012, 03.27AM IST
KOTTAYAM: Large quantity of natural rubber is being smuggled from Kottayam to other states through Kaliyikkavila route. After receiving several complaints, the rubber board has initiated steps to intensify patrolling from its regional centre in Marthandam, Tamil Nadu.
"This is being done on an experimental basis. Since smuggling cases are increasing, we felt the need to comb this area and have entrusted the job to our flying squad. We will review the new system at a later stage," said board director (licensing and excise) C C Chacko.
Kerala levies a value added tax (VAT) of 5% for 1/kg of rubber while the same charged by other states is less. This raises the price by Rs 2/kg in Kerala. Also cess tax (Rs 2/ kg) needs to be paid to the board. Officials said this additional expense is the driving force behind smuggling operations.
Staff shortage had forced the board to close down its Kavalkinar checkpost in Tamil Nadu on Thursday.
But, deputy director of publicity and public relations M G Satheesh Chandran said the checkpost lost its relevance following the closure of the sales tax check post and so it was shut down. "There are so many ways to enter Tamil Nadu, this is not the only route. There was staff shortage as we had two officials who worked in shifts. So the only way to address the smuggling issue was to form a patrolling unit that will check all documents required for inter-state transportation of rubber and whether cess was paid to the board," he said.
The board has two more checkposts at Walayar and Manjeswaram, where four officials handle the work. Board will send two more officers from Kottayam to strengthen the patrolling force to six officers, he added.
Meanwhile, some rubber dealers voiced their concerns. "Compare the annual production and consumption of rubber in Tamil Nadu. The board should maintain a record of this to find out the quantity of rubber being smuggled from Kerala," said a dealer on condition of anonymity.
Kottayam: Large quantity of natural rubber is being smuggled from here to other states through the Kerala border near Kaliyikkavila. In the wake of receiving several complaints, the Board has initiated steps to intensify patrolling operations based from its Regional Centre in Marthandam in Tamil Nadu. But the shortage of staff has forced the Board to close down its checkpost in Kavalkinar in Tamil Nadu, a place close to Marthandam on Thursday.
"This is only done on an experimental basis. Since smuggling is increasing we felt that combing this area by our flying squad would be much better. We will be reviewing the new system at a later stage to see whether it is effective," said C C Chacko, Director, Licensing and Excise Duty Department of the Board.
Kerala state is levying a Value Added Tax (VAT) of 5pc for per kg of rubber while it is less in other states. This makes an additional Rs 2 per kg in Kerala. Adding to this is the cess tax to be paid to the rubber board. According to officials in the Board it is this additional expense here which is the driving force behind smuggling of rubber.
Meanwhile, M G Satheesh Chandran, deputy director, Publicity and Public Relations, Rubber Board, said that the check post was closed down as it lost its relevance following the closing down of the Sales Tax Check post which used to operate in the same place. "There are many other roads to enter Tamil Nadu. Another issue was shortage of staff here as there were only two here which makes one person at a time," he said. "So the only way was to form a patrolling unit to check the documents required for inter-state transport of rubber and cess to be paid to the Board," he said.
The Board has two more check posts at Walayar and Manjeswaram where there are four staff each. Now the board will be sending two more persons from Kottayam to strenghthen the patrolling force in Marthandam which will increase its strength to six.
Meanwhile, some of the rubber dealers complained that smuggling of rubber to other states is flourishing. "Compare the annual production and consumption of Rubber in Tamil Nadu. Board should maintain a record of this to find out the quantity of rubber being smuggled from Kerala," said one of the dealers.
NMCE Rubber may drop on good rain, ample imports
June 20, 2012
KOCHI (Commodity Online): Natural Rubber in India’s National Multi Commodity Exchange (NMCE) may fall in coming days on the back of improved production in the major growing areas due to recent good amount of rains amid ample imports from Malaysia and other producers.
Presently, In NMCE, the rubber futures is trading higher tracking the global movements.
But the sluggish demand from domestic tyres makers due to ample supply from Malaysia is likely to put pressure over the prices. In addition, the recent rains in the major growing areas in Kerala is expected to improve the production of natural rubber in the country.
All this factors is likely to pull the prices further downwards in the domestic market.
Globally, the rubber prices have moved up on the back of improved crude oil prices and surge in Euro against the USD and Japanese Yen, which encouraged the investors to invest in riskier assets like rubber.
On Tuesday, the rubber prices in both global as well as in domestic exchanges remained subdued as the Brent crude oil prices dropped to a near-17-month low below $95 a barrel, which lowered the price of synthetic rubber.
Crude oil is used to manufacture synthetic rubber. If crude oil price rise synthetic rubber turns costly so natural rubber futures rises in exchanges and vice versa.
In Tokyo Commodity Exchange (TOCOM), rubber for July delivery traded up 1.3 yen to 256.4 yen per Kg and in NMCE, the commodity rose to Rs 18810 per ton on 20th June at 12:15 IST.
India’s rubber imports drop, inventory ample
Written by HMH | August 9, 2012 | 0 |
Aug 9 (Reuters) – India’s natural rubber imports in July fell by more-than 14 percent from a year ago to 17,084 tonnes, the state-run Rubber Board said on Thursday, as tyre makers slowed down purchases due to comfortable inventory built-up from earlier imports.
The country’s rubber production during the month edged up 2.6 percent on year to 66,000 tonnes despite poor rainfall in top producing Kerala state, the Board said in a statement.
“Rainfall is lower than the average, but we are getting it after regular interval. It will not affect on production,” said George Valy, president of the Indian Rubber Dealers Federation.
“Even in August production will be higher than last year.”
Production during the first four months of financial year ending in March was largely steady at 240,000 tonnes, data showed.
India is likely to produce 942,000 tonnes of natural rubber in the current year, up from 899,400 tonnes a year ago as production that was planned years ago comes onstream in non-traditional areas such as north-eastern states.
The world’s fourth-biggest producer’s consumption during July edged up to 83,000 tonnes from 81,210 tonnes a year ago.
India’s imports in first four month jumped nearly 27 percent on year 76,666 tonnes as in first three months tyre makers aggressively imported to cash in on lower overseas prices. (Reporting by Rajendra Jadhav in Mumbai, editing by William Hardy)
TNN | Aug 10, 2012, 03.27AM IST
KOTTAYAM: Large quantity of natural rubber is being smuggled from Kottayam to other states through Kaliyikkavila route. After receiving several complaints, the rubber board has initiated steps to intensify patrolling from its regional centre in Marthandam, Tamil Nadu.
"This is being done on an experimental basis. Since smuggling cases are increasing, we felt the need to comb this area and have entrusted the job to our flying squad. We will review the new system at a later stage," said board director (licensing and excise) C C Chacko.
Kerala levies a value added tax (VAT) of 5% for 1/kg of rubber while the same charged by other states is less. This raises the price by Rs 2/kg in Kerala. Also cess tax (Rs 2/ kg) needs to be paid to the board. Officials said this additional expense is the driving force behind smuggling operations.
Staff shortage had forced the board to close down its Kavalkinar checkpost in Tamil Nadu on Thursday.
But, deputy director of publicity and public relations M G Satheesh Chandran said the checkpost lost its relevance following the closure of the sales tax check post and so it was shut down. "There are so many ways to enter Tamil Nadu, this is not the only route. There was staff shortage as we had two officials who worked in shifts. So the only way to address the smuggling issue was to form a patrolling unit that will check all documents required for inter-state transportation of rubber and whether cess was paid to the board," he said.
The board has two more checkposts at Walayar and Manjeswaram, where four officials handle the work. Board will send two more officers from Kottayam to strengthen the patrolling force to six officers, he added.
Meanwhile, some rubber dealers voiced their concerns. "Compare the annual production and consumption of rubber in Tamil Nadu. The board should maintain a record of this to find out the quantity of rubber being smuggled from Kerala," said a dealer on condition of anonymity.
Kottayam: Large quantity of natural rubber is being smuggled from here to other states through the Kerala border near Kaliyikkavila. In the wake of receiving several complaints, the Board has initiated steps to intensify patrolling operations based from its Regional Centre in Marthandam in Tamil Nadu. But the shortage of staff has forced the Board to close down its checkpost in Kavalkinar in Tamil Nadu, a place close to Marthandam on Thursday.
"This is only done on an experimental basis. Since smuggling is increasing we felt that combing this area by our flying squad would be much better. We will be reviewing the new system at a later stage to see whether it is effective," said C C Chacko, Director, Licensing and Excise Duty Department of the Board.
Kerala state is levying a Value Added Tax (VAT) of 5pc for per kg of rubber while it is less in other states. This makes an additional Rs 2 per kg in Kerala. Adding to this is the cess tax to be paid to the rubber board. According to officials in the Board it is this additional expense here which is the driving force behind smuggling of rubber.
Meanwhile, M G Satheesh Chandran, deputy director, Publicity and Public Relations, Rubber Board, said that the check post was closed down as it lost its relevance following the closing down of the Sales Tax Check post which used to operate in the same place. "There are many other roads to enter Tamil Nadu. Another issue was shortage of staff here as there were only two here which makes one person at a time," he said. "So the only way was to form a patrolling unit to check the documents required for inter-state transport of rubber and cess to be paid to the Board," he said.
The Board has two more check posts at Walayar and Manjeswaram where there are four staff each. Now the board will be sending two more persons from Kottayam to strenghthen the patrolling force in Marthandam which will increase its strength to six.
Meanwhile, some of the rubber dealers complained that smuggling of rubber to other states is flourishing. "Compare the annual production and consumption of Rubber in Tamil Nadu. Board should maintain a record of this to find out the quantity of rubber being smuggled from Kerala," said one of the dealers.
NMCE Rubber may drop on good rain, ample imports
June 20, 2012
KOCHI (Commodity Online): Natural Rubber in India’s National Multi Commodity Exchange (NMCE) may fall in coming days on the back of improved production in the major growing areas due to recent good amount of rains amid ample imports from Malaysia and other producers.
Presently, In NMCE, the rubber futures is trading higher tracking the global movements.
But the sluggish demand from domestic tyres makers due to ample supply from Malaysia is likely to put pressure over the prices. In addition, the recent rains in the major growing areas in Kerala is expected to improve the production of natural rubber in the country.
All this factors is likely to pull the prices further downwards in the domestic market.
Globally, the rubber prices have moved up on the back of improved crude oil prices and surge in Euro against the USD and Japanese Yen, which encouraged the investors to invest in riskier assets like rubber.
On Tuesday, the rubber prices in both global as well as in domestic exchanges remained subdued as the Brent crude oil prices dropped to a near-17-month low below $95 a barrel, which lowered the price of synthetic rubber.
Crude oil is used to manufacture synthetic rubber. If crude oil price rise synthetic rubber turns costly so natural rubber futures rises in exchanges and vice versa.
In Tokyo Commodity Exchange (TOCOM), rubber for July delivery traded up 1.3 yen to 256.4 yen per Kg and in NMCE, the commodity rose to Rs 18810 per ton on 20th June at 12:15 IST.
India’s rubber imports drop, inventory ample
Written by HMH | August 9, 2012 | 0 |
Aug 9 (Reuters) – India’s natural rubber imports in July fell by more-than 14 percent from a year ago to 17,084 tonnes, the state-run Rubber Board said on Thursday, as tyre makers slowed down purchases due to comfortable inventory built-up from earlier imports.
The country’s rubber production during the month edged up 2.6 percent on year to 66,000 tonnes despite poor rainfall in top producing Kerala state, the Board said in a statement.
“Rainfall is lower than the average, but we are getting it after regular interval. It will not affect on production,” said George Valy, president of the Indian Rubber Dealers Federation.
“Even in August production will be higher than last year.”
Production during the first four months of financial year ending in March was largely steady at 240,000 tonnes, data showed.
India is likely to produce 942,000 tonnes of natural rubber in the current year, up from 899,400 tonnes a year ago as production that was planned years ago comes onstream in non-traditional areas such as north-eastern states.
The world’s fourth-biggest producer’s consumption during July edged up to 83,000 tonnes from 81,210 tonnes a year ago.
India’s imports in first four month jumped nearly 27 percent on year 76,666 tonnes as in first three months tyre makers aggressively imported to cash in on lower overseas prices. (Reporting by Rajendra Jadhav in Mumbai, editing by William Hardy)
Friday, August 3, 2012
Link to rubber board statistics
http://rubberboard.org.in/reports/exportimportvalue.pdf
India’s car makers post mixed sales in July
August 4, 2012
Most of India’s carmakers showed weak sales this month due to economic issues and rising fuel prices, although Maruti Suzuki posted a 9.2 percent increase. The numbers came as a surprise after Maruti suffered a deadly labor dispute last month at the Manesar plant, which is responsible for 40 percent of production.
Its rivals showed mostly weak sales, amid hefty taxes, elevated fuel prices and stubborn inflation that has kept interest rates high, pushing up the cost of vehicle loans.
Maruti Suzuki India, majority-owned by Japan’s Suzuki Motor Corp, said passenger car sales in July rose 9.2 percent to 82,234 vehicles thanks to a low base effect from last year when sales were down due to protracted labor troubles.
Maruti last month was hit again by labor unrest — the worst ever in its three-decade history — that left a manager dead and nearly 100 other executives hurt at its Manesar plant, which is responsible for 40 percent of its output.
The company said last week it had begun assessing the extent of the damage caused by the worker riot at the plant and did not know when it would reopen.
Meanwhile, the local unit of Hyundai Motor, which mostly sells petrol vehicles, reported a 1.5 percent decline in local sales to 49,667 vehicles in July.
Ford India domestic sales slid 16.8 percent to 6,236 vehicles in July, while General Motors in India fell 23.3 percent to 7,285 units.
Ford India said the country’s auto market conditions remained “challenging” as consumer confidence is yet to recover from the effects of a recent hike in petrol prices, ongoing high interest rates and inflation.
Ford India’s president Michael Boneham said he expects the “difficult market situation to ultimately recede in the long run”.
Tata Motors, which owns British luxury brands Jaguar and Land Rover, bucked the trend, as its July car sales surged 53 percent to 26,240 units, with growth seen across all segments.
India, which has been one of the world’s fastest-growing car markets in recent years, has been suffering a slowdown in demand as some buyers defer purchases due to expensive loans and high fuel costs.
The Society of Automobile Manufacturers (SIAM) forecasts car sales will grow by nine to 11 percent in the current financial year, which ends next March, on hopes that possible interest rate cuts will make auto loans cheaper and spur demand.
Rubber planters to begin tapping as rains fail
August 4, 2012
KOTTAYAM: Kurian Thomas, a small time rubber planter, never tapped his trees during Karkidakam, a period marked by heavy rains.
This year, he started tapping because rains have been scanty. “Big planters have a fixed schedule for tapping. But small-time farmers like me can’t follow that schedule. Since the weather is suitable I am doing my job. Who knows when rains will start again making tapping impossible then,” said Thomas.
Usually April-August is when the production of rubber comes down mainly because of the rains, resulting in more rubber being imported during this time. This year, 70,837 metric tonnes of rubber was imported from April-July. Last year, during the same period around 67,000 metric tonnes was imported. On August 1, the price of rubber (rss3) in Kottayam was Rs180 while in the international market it was Rs167 (Bangkok) on the same day.
The good price of the rubber may have also tempted planters like Thomas to start tapping despite this being Karkidakam.
Many planters are following Thomas’ example. Planters, who don’t use rain guards for the trees, start tapping only after monsoon ends in early September. But major planters tap during rainy season as they have rain guards to protect the trees.
“Since there are no rains, this is the ideal climate. Rubber tappers, who are jobless, can earn some bucks,” Thomas said. But he cautioned that rain shortage will hit rubber plantations next season since scanty rains can lead to a drought.
“There was no rainfall in my area for the past 9-10 days. This is bound to reflect next year,” he said. Meanwhile, rubber board climate experts said more rains are likely in October and November. But they won’t compensate the monsoon loss. Experts said Kottayam’s rainfall was 50% less than normal. Rubber board’s deputy director of public relations Satheesh Chandran advised all planters to use rain guards so that they can tap rubber during monsoon.
“The present climate is such that tapping is possible for anyone. But board recommends the use of rain guards so that tapping remains unaffected. Then only we can reap some benefits,” he said.
“Tapping is stopped during the February – March period as the moisture content in the soil is reduced. So an additional halt of 2-4 months due to the rains will affect a planter’s profits,” he said.
India’s car makers post mixed sales in July
August 4, 2012
Most of India’s carmakers showed weak sales this month due to economic issues and rising fuel prices, although Maruti Suzuki posted a 9.2 percent increase. The numbers came as a surprise after Maruti suffered a deadly labor dispute last month at the Manesar plant, which is responsible for 40 percent of production.
Its rivals showed mostly weak sales, amid hefty taxes, elevated fuel prices and stubborn inflation that has kept interest rates high, pushing up the cost of vehicle loans.
Maruti Suzuki India, majority-owned by Japan’s Suzuki Motor Corp, said passenger car sales in July rose 9.2 percent to 82,234 vehicles thanks to a low base effect from last year when sales were down due to protracted labor troubles.
Maruti last month was hit again by labor unrest — the worst ever in its three-decade history — that left a manager dead and nearly 100 other executives hurt at its Manesar plant, which is responsible for 40 percent of its output.
The company said last week it had begun assessing the extent of the damage caused by the worker riot at the plant and did not know when it would reopen.
Meanwhile, the local unit of Hyundai Motor, which mostly sells petrol vehicles, reported a 1.5 percent decline in local sales to 49,667 vehicles in July.
Ford India domestic sales slid 16.8 percent to 6,236 vehicles in July, while General Motors in India fell 23.3 percent to 7,285 units.
Ford India said the country’s auto market conditions remained “challenging” as consumer confidence is yet to recover from the effects of a recent hike in petrol prices, ongoing high interest rates and inflation.
Ford India’s president Michael Boneham said he expects the “difficult market situation to ultimately recede in the long run”.
Tata Motors, which owns British luxury brands Jaguar and Land Rover, bucked the trend, as its July car sales surged 53 percent to 26,240 units, with growth seen across all segments.
India, which has been one of the world’s fastest-growing car markets in recent years, has been suffering a slowdown in demand as some buyers defer purchases due to expensive loans and high fuel costs.
The Society of Automobile Manufacturers (SIAM) forecasts car sales will grow by nine to 11 percent in the current financial year, which ends next March, on hopes that possible interest rate cuts will make auto loans cheaper and spur demand.
Rubber planters to begin tapping as rains fail
August 4, 2012
KOTTAYAM: Kurian Thomas, a small time rubber planter, never tapped his trees during Karkidakam, a period marked by heavy rains.
This year, he started tapping because rains have been scanty. “Big planters have a fixed schedule for tapping. But small-time farmers like me can’t follow that schedule. Since the weather is suitable I am doing my job. Who knows when rains will start again making tapping impossible then,” said Thomas.
Usually April-August is when the production of rubber comes down mainly because of the rains, resulting in more rubber being imported during this time. This year, 70,837 metric tonnes of rubber was imported from April-July. Last year, during the same period around 67,000 metric tonnes was imported. On August 1, the price of rubber (rss3) in Kottayam was Rs180 while in the international market it was Rs167 (Bangkok) on the same day.
The good price of the rubber may have also tempted planters like Thomas to start tapping despite this being Karkidakam.
Many planters are following Thomas’ example. Planters, who don’t use rain guards for the trees, start tapping only after monsoon ends in early September. But major planters tap during rainy season as they have rain guards to protect the trees.
“Since there are no rains, this is the ideal climate. Rubber tappers, who are jobless, can earn some bucks,” Thomas said. But he cautioned that rain shortage will hit rubber plantations next season since scanty rains can lead to a drought.
“There was no rainfall in my area for the past 9-10 days. This is bound to reflect next year,” he said. Meanwhile, rubber board climate experts said more rains are likely in October and November. But they won’t compensate the monsoon loss. Experts said Kottayam’s rainfall was 50% less than normal. Rubber board’s deputy director of public relations Satheesh Chandran advised all planters to use rain guards so that they can tap rubber during monsoon.
“The present climate is such that tapping is possible for anyone. But board recommends the use of rain guards so that tapping remains unaffected. Then only we can reap some benefits,” he said.
“Tapping is stopped during the February – March period as the moisture content in the soil is reduced. So an additional halt of 2-4 months due to the rains will affect a planter’s profits,” he said.
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