Thursday, February 24, 2011

Expectation of the Industry



To uplift the tyre industry from the hardening raw material prices, ATMA has submitted a pre- budget Memorandum to the Government for its consideration in the forth coming Budget 2011-12.

Tyre Industry is one of the raw material intensive industries, where raw material cost accounts for nearly 62% of tyre turnover and 70% of the production cost. Natural Rubber is one of the key raw material for the tyres, accounting 42% of the raw material cost, followed by Carbon Black and Nylon Tyre Cord fabric and Rubber Chemicals.

Consumption of synthetic rubber is also increasing on the back of spike in the natural rubber prices. The consumption of synthetic rubber in tyre industry has increased by 34% to 1.70 lakh MT in April - October 2010 and constituted 71.9% of the total synthetic rubber consumption.

The raw material prices are still shooting north and are recording a new high. The spike in the cost from the past 12 months have alarmed to the tyre industry and has resulted in contraction of operating margins on q-o-q basis in quarter ended December 2010.

Read lot more in Rubber4U – 1st March 2011 issue

Natrual rubber prices fall

In the domestic market natural rubber prices fell by Rs 7/- to Rs 231 per kg on 23rd February and today by Rs. 3/- to Rs. 228/-, due to fall in the prices in the international and domestic future markets.

The prices of natural rubber at the Kottayam market on 22nd February was at Rs 238/- per kg, which came down to Rs. 228/- as on today, a fall of Rs. 10/- per kg in two days.

Today prices of natural rubber (RSS3) in the Bangkok market closed at Rs 288.02 per kg as against Rs 289.31 per kg on 23rd February 2010.

The prices of rubber at Shanghai, the largest consumer, have also fallen as the demand from China is declining. According to General Administration of Customs, China's natural rubber imports in January declined 14% compared with the same month last year to 147,382 metric tonnes. January's natural rubber imports were down 19% from December, when 181,542 tonnes were imported.

Read lot more in Rubber4U – 1st March 2011 issue

Wednesday, February 23, 2011

Will the Govt. consider the request?

In 2010, vehicle sales in the country was one of the fastest and growing auto markets in the world. Auto component makers have witnessed an increase in sales, but going ahead rising input costs are seen weighing on margins. Auto parts makers want the government's help to upgrade technology and spur investments to boost capacity. At the moment sector don't have enough technology, they are importing technology.

The Auto Component Manufacturers Association (ACMA) has reiterated the need for a technology upgradation and development fund, which was ignored by the finance minister last year. The industry urgently needs a corpus of Rs 7,500 crore to be spent over five years and the industry body has asked for an initial corpus of Rs 1,000 in 2011-12. ACMA has sought 0% import duty on steel and aluminium alloys, which account for almost 60% of raw material costs of auto parts makers.

Natural rubber prices has skyrocketed of late, hitting profitability of rubber goods manufacturers and the industry has asked the government to allow duty free import of 200,000 MT of natural rubber for 2011-12. Even if entire natural rubber production is consumed domestically, the availability of NR will fall short of demand.


Read lot more in Rubber4U – 1st March 2011 issue

Thursday, February 17, 2011

More reforms to follow and the Rubber Board data is factual

Prime Minister Manmohan Singh said that the government has not given up on reforms. More reforms will be unveiled in the Union Budget 2011-12. I sincerely hope in the upcoming Budget we will see a clearer picture of the reform agenda.

The government has been working on a host of reform initiatives, some of which have already been successful. I believe we are going to have a fresh wave of infrastructure investment with the help of public-private partnership model.

In response to allegations about the authenticity of Board data, Rubber Board Chairperson – Sheela Thomas in a statement has clarified that data provided by the board regarding NR stocks is factual; but the reported stocks may not be fully available in the market and also pointed out that the data is sourced from cultivators, traders, processors and manufacturers.

As on 31st January 2011, stock of natural rubber in the country was pegged at 327115 tonnes.

Read lot more in Rubber4U – 1st March 2011 issue

Monday, February 7, 2011

The New Rubber Board Chief



Smt. Sheela Thomas, IAS took over as Rubber Board Chairman on 7th February 2011. A 1985 batch IAS officer, has served the Kerala Government as Director - Social Welfare, Kottayam District Collector, Managing Director - Civil Supplies Corporation, Director - Industries, Director -Census Operations, Special Secretary - Agriculture, Secretary - Transport, Secretary - NORKA and Secretary - Information and Public Relations Department. It was while serving as the Principal Secretary to the Chief Minister of Kerala that Smt. Sheela Thomas was appointed as Rubber Board Chairman.

Smt. Sheela Thomas took over from V.J. Kurian, Chairman, Spices Board who has been holding additional charge of the Rubber Board since November 2010.

Read lot more in Rubber4U – 15th February 2011 issue

Friday, February 4, 2011

Rubber price at its peaks

Rubber prices made a glorious rebound on 4th February 2011, on strong demand and sharp gains in international and domestic future markets. According to industry experts, prices are set to break current records to create another historic high shortly.

Rubber grade RSS4 was at its all time high of Rs 239/- a kg. in the domestic market. As the growers do not get the international price (currently at Rs. 272/- a kg.) in the domestic market, have slowly started to push the rubber for export with an intention of realizing higher price. In turn, slowly export of rubber is on the rise.

Indian tyre makers bought natural rubber at a record $5.26 per kg on 4th February as farmers squeezed supplies seeking higher prices after a surge in the world markets. Supplies were less than expected as big farmers were not selling. They were anticipating further upside due to rising prices in Thailand.

The July delivery contract reached a high of 504 yen per kg before settling at 502.9 yen on the Tokyo Commodity Exchange. Tight rubber supply due to floods in Malaysia and slow arrivals of USS3 grade raw material in Thailand is also providing support to prices.

Read lot more in Rubber4U – 15th February 2011 issue