Wednesday, December 7, 2011

Positive outlook

Market sentiment regarding the eurozone sovereign debt crisis improved after Italy's new government put forward an package aimed at balancing the country's budget by 2013 and also European policymakers are working on new steps to resolve the eurozone sovereign debt crisis ahead of a key EU summit starting on Thursday.

The 30 billion euro package unveiled by Italian Prime Minister Mario Monti on 4th December, was taken as a positive cue by the market because the measures outlined not only Italy's plans to cut spending but also its growth strategy for the years ahead. On the other hand, US jobs report indicated that the unemployment rate in November fell to a 32 month low of 8.6%.

The natural rubber prices have built on last week's gain and remain firmly supported on losing ground due to worries about the outlook for the global economy. The latest estimates of demand and supply of natural rubber by the Association of Natural Rubber Producing Countries indicates that the supply would be 5.6% low (to 10.02 million tonnes) in 2011 and 3.6% in 2012.

On the other hand various industry players are planning to pour in huge investments to increase capacities across their product portfolio. These capacity expansion plans are anticipated to ultimately result into high tyre production, which is expected to grow around 10% during 2011-2014.

Read lot more in Rubber4U – 15th December 2011 issue

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