Monday, June 10, 2013

High inventory keeps rubber under pressure


Oil prices rose in the initial stage of trading (at 16.05 IST WTI crude oil were trading in red at US$95.65 per barrel) as moderate growth in new jobs in the United States raised hopes about a pick-up in demand, which points towards a growing economy.

According to China Association of Automobile Manufacturers wholesale deliveries of cars, multipurpose and sport utility vehicles increased 9% to 1.4 million units in May compared to 13% growth in April 2013. Natural rubber imports by China fell to 180000 in May compared to 227320 tonnes imported during April 2013. Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 0.1% to 114,324 tonnes last week.

Thailand’s restriction on rubber export ended on 31st May and inventories hovering close to multi-year highs, natural rubber prices are likely to continue to be under pressure for the rest of the second quarter of 2013 before recovering in the second half of 2013. Top three natural rubber producing countries - Thailand, Indonesia and Malaysia, is scheduled to meet in Indonesia during 12 – 14 June, to discuss measures to stabilise natural rubber prices.

Today, prices of RSS4 grade closed at `.173 a kg at Kottayam and RSS3 closed at `.162.30 a kg at Bangkok, while Malaysian SMR20 closed at `.132.84 a kg. On the Tokyo Commodity Exchange, June futures series closed at ¥239.7, July at ¥241.8, August at ¥243.5, September at ¥244.1, October at ¥245.4 and the contract for delivery in November closed at ¥247 a kg. While on the National Multi Commodity Exchange June futures were trading at `.175.25, July at `.171.23, August at `.167.97, September at `.165.01 and October at `.162.37 a kg., at 4.05 pm IST.

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