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.