Demand outlook worsens

Oil prices have been on a very gradual downward trend since April and have been brought down by the continuous poor economic reports, from the US, Europe and China. Oil prices fell sharply fearing that global economy is headed for a double dip recession and wave of economic crisis will significantly reduce global energy demand.

Auto industry has slowed down due to high fuel cost and hike in the interest rates. Rubber prices have also soared, affecting production of tyres. The increase in the raw material prices has affected the rubber industry. Removal of anti-dumping duty on Chinese tyres has damaged competitive environment in Indian tyre industry. There is uncertainty in the industry because of the competition posed by the Chinese tyre companies. Chinese tyres come 20% cheaper compared to Indian tyres. In the coming months, tyre companies will struggle to hold on their own and many of them may see red in their balance sheets.

While addressing the media persons at the 59th AGM of All India Rubber Industries Association at Chennai, Rubber Board Chairperson, Sheela Thomas, said rubber production is set to increase to 9.02 lakh tonnes and the consumption will be over 9.77 lakh tonnes during the year. The industry believes the estimates of shortfall by the board are conservative, and the board had launched a separate survey to assess the natural rubber stocks. The findings of the sample survey is expected to be out in October.

The Rubber Board is projecting a 75,000 tonnes shortfall in availability of natural rubber this year. The President of All India Rubber Industries Association, Vinod Simon, said securing the natural rubber is the single largest concern for the industry. While long term initiatives could include expansion of plantation areas. Government needs to be supportive on short term measures like facilitating imports. The prevailing import duties need to be brought down as costs are increasing and the shortfall cannot be bridged at current rates.

The price of RSS3 grade natural rubber in the international market at Bangkok today closed at Rs 219.74 per kg., SMR-20 closed at 216.50 a kg at Kuala Lumpur and on the other hand domestic RSS4 grade closed at Rs. 211 a kg at Kottayam. At the National Multi Commodity Exchange (NMCE), rubber future prices for October delivery closed at Rs 212.07 per kg. At Tokyo Commodity Exchange futures prices for October delivery closed at 297.70 yen/kg.

Read lot more in Rubber4U – 1st October 2011 issue

AIRIA Office Bearers for the year 2011-12

Petrol gets dearer and the interest ……

Crude oil import gets costlier with the drop in rupee value. India has been increasing fuel prices in order to ease its fiscal burden. Petrol prices have gone up once again, which is the second hike by the government in four months. After the hike the petrol would cost Rs. 66.84 a litre in Delhi, Rs. 71.62 in Mumbai, Rs. 71.15 in Kolkata, Rs. 70.64 in Chennai and Rs. 74.50 in Bangalore.

Inflation in India rose to 9.78% for August, its highest in 13 months, adding to expectations that the Reserve Bank of India (RBI) will raise interest rates on 16^th September, for the 12th time since March 2010. The hike in petrol prices and also hike in interest rates will impact the auto sector. The interest rate on automobile loans is expected move up, resulting in weak demand for the vehicles. The sluggish growth in auto sales will impact rubber goods manufacturing industry also.

Read lot more in Rubber4U – 1st October 2011 issue

List of Tyres allowed to import

Tyres allowed to Import

Rubber Cess hiked to Rs. 2/-

Rubber Cess

US faces crisis

While proposing to pull the United States out of a “national crisis, President Barack Obama pressed Congress to act urgently to approve a jobs package of tax cuts and government spending. Obama wants Congress to pass his “American Jobs Act” by the end of this year. But that may be hard to achieve with politicians already focusing on the presidential and congressional elections in November 2012. If Obama can push through his plan, it might provide a jolt to an economy that has stalled and give companies confidence that if they invest and hire there will be customers for their products and services.

Union Finance Minister Pranab Mukherjee said the information and technology (IT) industry might be affected due to the current economic crisis in the US, but cautioned that there was no need to press the panic button yet. It is too premature to say what the final shape of the downgrading of the US economy would be.

Domestic demand is the main strength of the Indian economy, which other advanced economies do not have. During the global slowdown in 2008, India managed 6.8% growth despite negative growth in exports for 11 consecutive months and nearly 60% of India’s export destinations were Japan, EU and USA. The fiscal crisis in the US and Europe could have some impact on exports, though it was yet to find out how much the Indian export industry has benefited from exporting to new locations in the past two years.

Read lot more in Rubber4U – 15th September 2011 issue

Tyres which can be imported by OEMs

A Committee was constituted to finalize the list of tyres not manufactured domestically and to be imported by the OEMs for selling replacement market through their authorized dealers.

The committee has finalized a list of 316 sizes and types of tyres which are not manufactured domestically and to be imported by the OEMs. This list is inclusive of 103 sizes and types of tyres as circulated vide Department’s Office Memorandum dated 13.05.2011.

Read lot more in Rubber4U – 15th September 2011 issue

Published on 10th September 2011