Wednesday, December 30, 2015

Gloomy year comes to an end with little sparkle


After plunging 48% in 2014, the crude oil price has fallen another 36% since the end of last year. Rubber product makers and exporters may continue to see growth as natural rubber prices may continue to stay low because of low crude oil prices.

Global demand for natural rubber is slowing as the economy cools in China. Supplies are expanding after a decade-long rally in rubber prices to a record in 2011 encouraged top producers like Thailand, Indonesia and Vietnam to plant more trees. Output will exceed use for two more years, with the surplus quadrupling in 2016. Global production is set to exceed demand by 411,000 tonnes next year and by 430,000 tonnes in 2017, compared with a surplus of 98,000 tonnes in 2015, according to The Rubber Economist Ltd., a London based industry researcher.

Rubber traded in Tokyo has tumbled 71% from a record in 2011, touching a six-year low of ¥153 a kg on 6th November 2015. Tokyo rubber prices climbed more than 14% to 174.8 yen at the beginning of December from a six-year low of ¥153 a kg. The Tokyo Commodity Exchange rubber dropped to a one-month low on 29th December, stretching its losses into a fourth consecutive session, as slowing demand from top consumer China and weakness in crude oil.

Crude oil prices still remained under pressure on fears of slowing demand added to worries over near-record global production levels. Natural rubber prices often follow moves in crude oil as the commodity competes with synthetic rubber and the market is concerned about slowing economic growth in China.

United Planters Association of Southern India (UPASI) has said cheap imports are harming the rubber industry. It wants the government to introduce safeguards to protect domestic players. "With damage to domestic industry being evident, government should play its role as regulator and introduce safeguards to limit imports. The recommendations of the Parliamentary Standing Committee on the rubber industry in India have clearly stated that uncontrolled imports are harming the growing domestic industry," said Dharmaraj, president of UPASI.

The benchmark RSS4 grade rubber closed at `.102.50 a kg at Kottayam, while RSS3 grade closed at `.79.94 a kg at Bangkok and Malaysian SMR20 closed at `.75.60 a kg. On National Multi Commodity Exchange January 2016 futures closed at `.103.91 a kg, February at `.105.70 and March closed at `.108.04 a kg. On Tokyo Commodity Exchange, January 2016 futures series closed at ¥147.3 a kg, February at ¥149.9, March at ¥153.1, April at ¥166.6, May at ¥157.7 and the contract for delivery in June 2016 closed at ¥159 a kg. It is definitely going to be an interesting year in 2016 in terms of the economy and financial markets.

To read Rubber4U – 1st January 2016 issue: http://rubber4u.com/Public/Abcd.pdf for latest forecast
For 2015-16 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Friday, December 11, 2015

NR output and imports down


Natural rubber imports in November 2015 dropped nearly -13.72% to 32,308 tonnes from 37,445 tonnes in November 2014. Import of natural rubber was mainly from Indonesia, Thailand, Vietnam and Malaysia.

Natural rubber production for the month of November 2015 decreased by 16.67% to 50,000 tonnes compared to 60,000 tonnes during November 2014. While the consumption during the month decreased by 3.87% to 82,000 tonnes compared to 85,300 tonnes during the same period of 2014.

The benchmark RSS4 grade rubber closed at `.103 a kg at Kottayam, while RSS3 grade closed at `.86.33 a kg at Bangkok and Malaysian SMR20 closed at `.77.53 a kg. On National Multi Commodity Exchange December 2015 futures closed at `.100.27 a kg, January 2016 at `.101.80, February at `.102.18 and March closed at `.103.69 a kg. On Tokyo Commodity Exchange, December 2015 futures series closed at ¥157.8 a kg, January 2016 at ¥161.3, February at ¥162.4, March at ¥164.9, April at ¥166.5 and the contract for delivery in May 2016 closed at ¥168 a kg.

To read Rubber4U – 15th December 2015 issue: http://rubber4u.com/Public/Abcd.pdf
For 2015-16 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf
Visit Us at Rubber World Expo 2015 at B-34, BEC, Goregaon-Mumbai, India.



Saturday, December 5, 2015

Demand to regulate rubber imports


The persistent fall in the prices in the past two years had caused concern among rubber growers in Kerala. Kerala government has asked Centre to regulate import of natural rubber and hike excise duty to check its falling prices in domestic market. Recently, Kerala government had introduced a support scheme whereby small-scale rubber growers would get an assured price of `.150 per kg. The State government's commitment towards this scheme would come to around `.300 crore in the current fiscal and it would go up to `.500 crore next year.

The problem of low-cost imports is putting at risk the entire ‘Make in India’ clarion call by the Indian government. According to Mohinder Gupta, president of All India Rubber Industries Association, much higher import duties on raw materials such as natural and synthetic rubbers than on finished rubber goods have impacted the export competitiveness of the rubber sector in India. Import duty should be zero for the rubber and raw materials not being manufactured in the country. The proposed national rubber policy is still a work-in-progress. The meetings of the working group formed for framing national rubber policy are over. Different stakeholders have made their submissions. We have requested the government to come out with the policy as soon as possible.

Through bilateral friendly consultations in Thailand, Sinochem and Rubber Authority of Thailand (RAOT) signed a purchase agreement of 200,000 tonnes of natural rubber, which is the largest order in 2015.

The benchmark RSS4 grade rubber closed at `.105 a kg at Kottayam, while RSS3 grade closed at `.85.34 a kg at Bangkok and Malaysian SMR20 closed at `.77.97 a kg. On National Multi Commodity Exchange December 2015 futures closed at `.105.38 a kg, January 2016 at `.105.49 and February closed at `.106.16 a kg. On Tokyo Commodity Exchange, December 2015 futures series closed at ¥161.8 a kg, January 2016 at ¥165.1, February at ¥167.3, March at ¥169, April at ¥169.8 and the contract for delivery in May 2016 closed at ¥170.7 a kg.

To read Rubber4U – 15th December 2015 issue: http://rubber4u.com/Public/Abcd.pdf
For 2015-16 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf
Visit Us at Rubber World Expo 2015 at B-34, BEC, Goregaon-Mumbai, India.

Thursday, December 3, 2015

Little relief but still in crisis


Rubber growers in Kerala were bearing the brunt of rubber imports, leading to a fall in price in the domestic market. Today during the Zero Hour, Lok Sabha MPs from Kerala backed the Congress leader Anto Antony’s demand for immediate intervention from the Centre to arrest rising imports of natural rubber. Home Minister Rajnath Singh assured the agitated MPs that he would take up the matter with the Minister concerned.

U.S. manufacturing contracted in November for the first time in three years as the sector buckled under the weight of a strong dollar and deep spending cuts by energy firms, but robust automobile sales suggested the economy remained on solid ground.

An industry survey showed Manufacturing activity in China hit a three year low in November, supporting the case for more accommodative policies as authorities seek to prop up growth.

While benchmark TOCOM rubber futures hit a 6 week high on Thursday, helped by an overnight jump in Shanghai futures and as investor’s unwound short positions on the view that prices may be bottoming out.

Today the benchmark RSS4 grade rubber closed at `.105 a kg at Kottayam, while RSS3 grade closed at `.85.34 a kg at Bangkok and Malaysian SMR20 closed at `.77.97 a kg. On National Multi Commodity Exchange December 2015 futures closed at `.104.88 a kg, January 2016 at `.104.84, February at `.105.16 and March closed at `.106.02 a kg. On Tokyo Commodity Exchange, December 2015 futures series closed at ¥161.8 a kg, January 2016 at ¥165.1, February at ¥167.3, March at ¥169, April at ¥169.8 and the contract for delivery in May 2016 closed at ¥170.7 a kg. On Friday, most probably Tocom futures contract for delivery in May 2016 may trade in the range of ¥168 & ¥172 a kg.

To read Rubber4U – 1st December 2015 issue: http://rubber4u.com/Public/Abcd.pdf
For 2015-16 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf
Visit Us at Rubber World Expo 2015 at B-34, BEC, Goregaon-Mumbai, India.