SR production & consumption down

India’s natural rubber production registered a negative growth of 7.2% to 52,700 tonnes in April 2012, compared to 56,800 tonnes in April 2011. While consumption was 81,750 tonnes compared to 81,375 tonnes during April 11.

Import of natural rubber during April 2012 was 17,509 tonnes compared to 5,599 tonnes during April 2011. India exported 787 tonnes of natural rubber during April 2012 as against 2,214 tonnes in April 2011.

In April 2012, synthetic rubber production fell by 11% to 8,285 tonnes, when compared with 9,262 tonnes in April 2011. While its consumption declined by 5% to 35,150 tonnes in April 2012, compared to 36,890 tonnes in April 2011. During the month under review, consumption by the auto tyre industry also fell by 8% to 25,834 tonnes from 28,062 tonnes in the year-ago period.

Import of synthetic rubber declined by 5% to 26,420 tonnes in April 2012, from 27,868 tonnes in April 2011. The total stock of synthetic rubber in the country at the end of April 2012 stood at 49,880 tonnes.

Natural rubber prices slipped amid concerns over the euro zone debt crisis and falls to oil prices, pushing up demand for synthetic rubber which is made using crude.

On the back drop of gloomy picture of the country’s economy and sluggish growth outlook, Reserve Bank of India, presenting its monetary policy review on 31^st July, may not cut rates.

Committee to study issues related to futures trading

The Government has constituted an expert committee consisting of 11 members, to examine the various issues related to rubber futures trading and make suitable recommendation accordingly, under the chairmanship of Prof. K.K. Abraham, President, Pala Marketing Co-operative Society.

The study would be relating to examine the restriction on the daily volatility of rubber prices from 4% to 1% or 2% and study the transparency in the conduct of futures trading. The study term of the committee has been fixed as three months; it would be further extended to six months. The committee has decided to inform all the stake holders and invite their views in this regard.

Read lot more in Rubber4U – 1st August 2012 issue

NR import expected to rise

Thai rubber growers called on the government to shore up rubber prices and purchase rubber at Bt120 per kg. Preecha Sukkasem, representative of rubber growers in the southern region, submitted a letter to Deputy Agriculture and Cooperatives Minister Nattawut Saikuar, and demanded that the relevant state agencies speed up the process to buy rubber at Bt120 per kg within one month. If the government fails to meet their demands by the deadline, the growers threatens to gather 20,000 signatures and appeal the government change relevant ministers who they deem responsible for their problems. They also threatened to gather in front of Prime Minister Yingluck Shinawatra’s residence until the problems are resolved.

Today, Indian sheet rubber prices declined to `.179.50 per kg, following sharp decline in the international market as worries over the Euro Zone debt crisis, which is expected to worsen. In the futures market, the August series declined to `.175.70, September to `.174.72, and November to `.175.20 a kg on the National Multi Commodity Exchange. RSS3 grade dropped to `.168.93 a kg at Bangkok. TOCOM rubber futures shed more and July futures closed at ¥215.5 per kg, August at ¥216.5, November at ¥224.5 and December at ¥226.6 per kg.

On 15^th June 2012, Rubber4U has forecasted that RSS4 grade rubber price to touch `.178 per kg and TOCOM rubber futures to ¥240 per kg, which has gone further down, which indicates there will be rise in import of natural rubber by the domestic tyre manufacturers and in turn will increase the pressure on the domestic natural rubber prices.

Read lot more in Rubber4U – 1st August 2012 issue

Injection molding machine market may contract

Global injection molding machines market showed good growth in 2011, during which China's market slow down in the second half of the year due to its government's tighter monetary policy and while Germany and U.S saw a double digit growth, Japan grew by 8.7%.

Market demand has weakened by slack industrial growth. Germany's Plastics and Rubber Machinery Association, forecast that its industry would see a slight decline of 2% in 2012 and a growth 7% is expected in 2013.

Read lot more in Rubber4U – 1st August 2012 issue

NR prices likely to weaken due to lack of demand

The market was supported by expectations for China’s additional stimulus and also due to the speculation that Federal Reserve Chairman Ben S. Bernanke may hint at further monetary easing. Bernanke is going to present the outlook for the world’s largest economy in his semi-annual monetary-policy report.

Global oil prices headed higher, driven by heightened political tensions in the Middle East after bomb attacks against Syria and Israelis. Tensions continue to escalate in the Middle East. Oil edged above $89 a barrel and as investors hoped that the Federal Reserve will eventually provide stimulus to the U.S. economy.

Thailand’s budget for purchases, aimed at supporting prices, may increase to 30 billion baht to buy as much as 200,000 tonnes of natural rubber from farmers. The measures assure that the government is serious in shoring up rubber prices.

RSS4 grade rubber closed weak at `.184 a kg at Kottayam and RSS 3 closed up at `.173.75 a kg at Bangkok. Currently, July futures is trading at ¥236.1 a kg, August at ¥236.5, September at ¥240.3, October at ¥243, November at ¥244.7 and December at ¥246.6 a kg, on the Tokyo Commodity Exchange.

Read lot more in Rubber4U – 1st August 2012 issue

Biggest car market losing steam

In June, China’s auto sales were up 9.9% y-o-y, but lower than May 2012, which indicates world’s biggest car market is losing steam. China’s auto sales began to slow last year after the government rolled back buying incentives. Total vehicles sales for June stood at 1.58 million units compared to 1.61 million units in May 2012.

The domestic economy still faces downward pressure; there is a lack of momentum for rapid growth of auto sales in the short term. China’s economy has also been weakening, recording 8.1% growth in the first quarter of this year, its slowest pace in nearly three years.

On the other hand Malaysian rubber market is expected to be firmer next week. Dealers are bullish that the rubber prices will edge higher due to supply shortage in major producing countries. However, price might also be affected by soft demand, impacted by the economic problems in the eurozone and China’s slow growth.

Read lot more in Rubber4U – 1st August 2012 issue

Rubber skids and industry grows 5.3%

The overall sluggishness in the industrial sector persists in spite of the slight upwardness in IIP growth in May. Domestic rubber markets turned weak and prices failed to sustain at the early levels following another weak closing on the National Multi Commodity Exchange (NMCE). The sentiments were also hit by unfavourable reports and the absence of major buying.

RSS4 grade rubber closed at `.186 a kg at Kottayam and Kochi. At NMCE, RSS 4 July series closed at `.182.50, August at `.182.82, September at `.181.60, October at `.181.50 and November at `.180.50 a kg. RSS 3 closed weak at `.172.95 a kg at Bangkok. The July futures slipped to ¥238.5 from ¥240.5 during the day session and then to ¥236.8 in the night session on the Tokyo Commodity Exchange.

According to ICRA report, Indian tyre industry grew by 5.3% in terms of volumes despite economic slowdown in 2011-12. Revenues of the tyre companies recorded a robust 28% growth largely on account of over 20% hike in realisations and the sharp depreciation in rupee which drove export revenues by 46%.

Govind Rubber Ltd. engaged in auto tyres, tubes and high-end bicycle tyres manufacturing, is setting up a greenfield project near Dahej in Gujarat with a capital outlay of Rs 750 crore. The plant will have a production capacity of 225 tonnes per day. The company aims to sell its products in Europe, Korea, Indonesia, Vietnam, China and India. In the domestic market, company has decided to expand into manufacturing of 2 and 3 wheeler tyres at the current location in Ludhiana.

Read lot more in Rubber4U – 15th July 2012 issue