Rubber4U

Rubber4U - 1st November 2015 issue

Imports a set-back for industry

The increase in imports in the T&B segment has been a cause for concern as it accounts for around 60% of domestic tyre industry's revenue. The lower prices is attracting price sensitive customers and thus were using bias tyres, as imported TBR tyres are priced 25% lower than domestically produced TBR tyres. The import volume of tyres in T&B and two-wheeler segments increased by 25.3% and 120.5% respectively on a y-o-y basis in the first quarter of 2015-16. Chinese imports in the T&B segment increased 138% y-o-y in the first quarter of 2015-16, accounting for around 80% of the total imports in this segment. The increase in imports from China is likely to continue, driven by reduced demand in China as well as the imposition of high countervailing and anti-dumping duties by the US on Chinese tyres.

Today the benchmark RSS4 grade rubber closed at `.114 a kg at Kottayam, while RSS3 grade closed at `.84 a kg at Bangkok and Malaysian SMR20 closed at `.81.43 a kg. On National Multi Commodity Exchange November 2015 futures closed at `.113.10 a kg, December at `.112.55, January 2016 at `.112.50 and February closed at `.113.50 a kg. On Tokyo Commodity Exchange, November 2015 futures series closed at ¥151.9 a kg, December 2015 at ¥157.3, January 2016 at ¥160.1, February at ¥162.7 and the contract for delivery in March 2016 closed at ¥164.5 a kg. On Tuesday, most probably Tocom futures contract for delivery in April 2016 may trade in negative range of ¥163 & ¥157 a kg.

To read Rubber4U – 1st November 2015 issue: http://rubber4u.com/Public/Abcd.pdf

For 2015-16 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Rubber4U

Rubber4U - 15th October 2015

Rubber4U

Rubber4U - 1st October 2015 issue

Cut in RBI repo rate

Today, Reserve Bank of India cut its key repo rate by 50 basis points to 6.75%, with inflation running at record lows and the economy in danger of slowing down. On the other hand, the international crude oil price of Indian basket declined 0.31% to US$44.79 a barrel on 28th September as against US$44.93 a barrel on 25th September. While Rupee closed stronger at `.66.08 per US$ on 28th September as against `.66.10 per US$ on 25th September.

The benchmark RSS3 grade closed at `.86.94 a kg at Bangkok and Malaysian SMR20 closed at `.81.18 a kg. On National Multi Commodity Exchange October 2015, the futures were trading at at `.114 a kg, November at `.113.79, December at `.114 and January 2016 at `.114 a kg at 12.20 IST. Tokyo Commodity Exchange October 2015 futures series closed at ¥153 a kg, November at ¥154.4, December at ¥158.3, January 2016 at ¥161.4, February at ¥163 and the contract for delivery in March 2015 closed at ¥164.5 a kg.

To read Rubber4U – 1st October 2015 issue: http://rubber4u.com/Public/Abcd.pdf

For 2015-16 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Indication of short uptrend in October

The anti-dumping duty can be imposed only if goods are imported at dumping prices. Safeguard duties are measures to protect the domestic industry from a sudden surge in imports. The World Trade Organization does not allow such duties to be imposed for more than four years at a stretch.

In February 2015, Automotive Tyre Manufacturers' Association (ATMA), in its pre-budget submission, has urged the government to increase the customs duty on tyres from basic rate of 10% to 20% and putting imports of tyres under negative list in all trade agreements, so as to provide a level-playing field to the domestic manufacturing. And now ATMA has sought safeguard tariffs on car tyre imports from China and South Korea.

The benchmark RSS4 grade rubber closed at `.112.50 a kg at Kottayam, while RSS3 grade closed at `.87.91 a kg at Bangkok and Malaysian SMR20 closed at `.82.39 a kg. On National Multi Commodity Exchange October 2015 futures closed at `.114.25 a kg, November at `.113.92 and December at `.114.53 a kg. Tokyo Commodity Exchange October 2015 futures series closed at ¥160.1 a kg, November at ¥160.5, December at ¥164.6, January 2016 at ¥167.4, February at ¥169.4 and the contract for delivery in March 2015 closed at ¥170.6 a kg. On Tuesday, most probably Tocom futures contract for delivery in March 2016 may trade in negative and in the range of ¥162 & ¥167 a kg.

To read Rubber4U – 1st October 2015 issue: http://rubber4u.com/Public/Abcd.pdf

Sentiment remains uncertain

Today, Tokyo Commodity Exchange rubber futures fell after long national holiday in Japan and slowing demand in China due to biggest fall in China’s factory activity. The Tocom rubber contract for February delivery had fallen ¥5.7 per kg. According to a private survey, activity in China’s factory sector unexpectedly shrank to a six and half year low in September, raising fears of a sharper slowdown.

The Shanghai rubber futures contract ended lower over concerns of slowing demand from China's automobile industry. Overall investor sentiment remains uncertain after the Federal Reserve declined to raise interest rates for the first time since 2006 last week.

Oil prices, along with the overall commodities sector, have been increasingly sensitive to any negative news on China's economy in recent weeks. Global oil markets tumbled on Wednesday, and on Thursday closed in green, WTI crude futures closed at US$ 44.91 per barrel, while Brent crude futures closed at US$ 48.17 a barrel.

Today the benchmark RSS4 grade rubber closed at `.112 a kg at Kottayam, while RSS3 grade closed at `.87.42 a kg at Bangkok and Malaysian SMR20 closed at `.80.92 a kg. On National Multi Commodity Exchange October 2015 futures closed at `.114.45 a kg, November at `.113.80, December at `.113.92 and January 2016 closed at `.114.09 a kg. On Tokyo Commodity Exchange, September 2015 futures series closed at ¥156 a kg, October at ¥155.4, November at ¥158.6, December 2015 at ¥161.5, January 2016 at ¥164.2, and the contract for delivery in February 2016 closed at ¥165.6 a kg.

To read Rubber4U – 1st October 2015 issue: http://rubber4u.com/Public/Abcd.pdf

For 2015-16 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf