Rubber prices rise on purchase plans

TOCOM rubber futures rose on Monday as investors covered short positions on news that Thailand plans to import 10,000 tonnes of rubber and China will boost economic growth, which in turn will improve demand for rubber, though gains were limited by concerns over the euro zone economy after a G8 meeting failed to offer a specific prescription to the crisis.

Thailand will import rubber by receiving deliveries from TOCOM in a bid to avoid shipment delays at a time when domestic supply is tight because of the impact of unseasonal rains.

Curretly, rubber contract for June to October delivery were trading at ¥283, ¥284.1, ¥285.5, ¥280.7 and ¥276.1 per kg, respectively on the Tokyo Commodity Exchange. On Monday, RSS4 grade closed at `194 a kg at Kottayam and RSS3 grade closed at `205.85 today at Bangkok.

Read lot more in Rubber4U – 1st June 2012 issue

Rubber showing positive trend

With the slowing global economic crisis and increasing consumption of natural rubber by the tyre sector in India, the rubber futures in Tokyo commodity Exchange and in India’s National Multi Commodity Exchange rose.

India is expected to produce double the number of truck, bus radial tyre to 4.8 million tyres in 2012-13 from 2.67 million tyres in 2011-12 is likely to keep the price of natural rubber higher.

Production and consumption of natural rubber in 2011-12 were 8,99,400 tonnes and 966,750 tonnes, respectively. Natural rubber consumption in the tyre sector increased by 6.3%, whereas in the non-tyre sector it declined by 5.4%. Import and export of NR in 2011-12 were 2,05,433 tonnes and 27,145 tonnes respectively. The carryover stock at the end of March 2012 was 2,30,000 tonnes.

Production and consumption of natural rubber in 2012-13 are projected at 9,42,000 tonnes and 1,006,000 tonnes respectively — a deficit of 64,000 tonnes.

While delivering the keynote address at the inaugural meeting of the Rubber Board campaign for improving the quality of sheet rubber, Kaushik Roy, Convener, Raw Material group, Automotive Tyre Manufacturers Association said that Indian rubber industry has great potential globally, and the country could be the growth driver especially after the recession. The ongoing decade will be a game changer for both the rubber plantation sector and the rubber industry. A commitment is required for quality in production.

According to Automotive Tyre Manufacturers' Association, tyre production and exports increased by 6% and 24%, respectively during April 2011- February 2012 period.

Read lot more in Rubber4U – 15th May 2012 issue

IMF raised economic forecasts

Oil traded near the highest close in two weeks after the International Monetary Fund (IMF) boosted its growth outlook and a Spanish debt sale raised more than planned, easing concern - an economic slowdown will curb crude demand.

Rubber increased by the most in two months after Spain sold more debt than targeted and the IMF raised economic forecasts, easing concerns about slowdown for natural rubber demand. The April rubber futures closed at ¥294.7 per kg, May at ¥297.8, June at ¥301.5, July at ¥305.8, August at ¥309.6 and September at ¥311.5 on the Tokyo Commodity Exchange.

Tyre makers have built inventory from imports and their buying in the local market is lower than last year, due to which natural rubber prices in India are likely to weaken. Today, RSS4 grade closed at `196.50 a kg at Kottayam and RSS3 grade closed at `197.82 a kg at Bangkok.

Read lot more in Rubber4U – 1st May 2012 issue

Economy showing positive trend

India's annual inflation rate for all commodities, based on the new series of Wholesale Price Index, for the month of March fell marginally to 6.89% from the preceding month's 6.95% and 9.68% reported during the corresponding month of 2011.

Reserve Bank of India cut interest rates for the first time in three years by an unexpectedly sharp 50 basis points to give a boost to sagging economic growth, but warned that there is limited scope for further rate cuts.

The natural rubber futures have weakened in both domestic and international market on easing crude oil prices as the synthetic rubber, widely used alternative for natural rubber. With the dip in crude oil prices, the manufacturing cost of synthetic rubber also goes down. This leads to the shift in demand towards synthetic rubber from natural rubber. The demand for natural rubber is expected to rise this year as the global economy is reviving from the crisis and the present consumption trend is showing positive trend for coming months.

Read lot more in Rubber4U – 1st May 2012 issue

NR production marginally down and anti-dumping duty extended

According to Association of Natural Rubber Producing Countries, due to heavy rainfall in major rubber growing areas of Malaysia and China, the global natural rubber production is marginally lowered to 10.420 million tonnes in 2012 against the earlier estimates of 10.529 million tonnes. The dip in rubber production may not affect the price of the commodity as the present demand scenario is very weak due to Euro-zone crisis and slow export demand from China.

According to a notice from the Ministry of Finance, India extended anti-dumping duties on imports of non-radial tyres used in buses and trucks from China and Thailand until 7^th October 2012. (for more details, visit: www.rubber4u.com)

Today, RSS4 grade closed at `199 a kg at Kottayam and RSS3 grade closed at `200.80 on 5^th April at Bangkok. Rubber for April delivery on Tokyo Commodity Exchange closed at ¥309.7 per kg and in India’s National Multi commodity Exchange the commodity closed at `.197.78 per kg.

NR prices likely to pick up on supply concern

Global demand for rubber processing chemicals is forecast to increase 4.7% per year through 2015 to 1.35 million metric tonnes. Gains will be driven by continuing robust gains in the Asia/Pacific region and recovery in demand in the US, Western Europe.

The unfavourable rainfall in the rubber growing areas in the major rubber growing nations has interrupted the tapping process, eventually pulling down the global supplies, which is likely to push up natural rubber prices.

In India natural rubber imports are slowing down; tyre makers are raising purchases from domestic market as auto sales are rising. Rubber production in India peaks during October-January and starts falling from February. Drop in tapping in Kerala has tightened supplies and drop in stocks also aided the rise in natural rubber prices.

Rubber for April delivery on Tokyo Commodity Exchange closed at ¥313.5 per kg and in India’s National Multi commodity Exchange the commodity closed at `.199.70 per kg on 3rd April.

Rubber industry sets up RSSC

National Skill Development Corporation (NSDC) and All India Rubber Industries Association (AIRIA) have formed a Section 25 company - Rubber Industries Sector Skill Council (RSSC) for the development of labour intensive rubber industry. Under the RSSC project, the number of trainees to be certified over a period of 10 years will be close to 700,000 with another 300,000 in-service personnel.

An MoU has been signed between NSCD and a partnership formed between AIRIA and Automotive Tyre Manufacturers Association (ATMA) to jointly promote RSSC. The MoU was signed by chief executive officer and managing director of NSDC - Dilip Chenoy and AIRIA president - Vinod Simon, in the presence of Rubber Board chairperson - Sheela Thomas and ATMA vice chairman - Anant Goenka. AIRIA and ATMA will jointly infuse equity in RSSC. NSDC has agreed to fund the formation and operations of the RSSC through a combination of grant and loan.

Read lot more in the latest issue of Rubber4U