Rubber still in bearish stage

In a letter sent by Kerala Finance Minister K M Mani to Anand Sharma, the Union Minister for Commerce and Industry, has pointed out that on the request of tyre manufacturers, Union Minister had given permission for the import of natural rubber. Unfortunately the said decision has created a sudden fall in the price of natural rubber and the farmers are extremely worried about the government’s decision.

The country’s first e-SBR unit has been set up by Indian Synthetic Rubber Ltd. (ISRL), a joint venture promoted by Indian Oil, TSRC Corporation, Taiwan, and Marubeni Corporation, Japan, is ready for commissioning in Panipat, Haryana and Union Minister for Petroleum and Natural Gas, M. Veerappa Moily, will commission the `.950 crore project on Friday.

Tyre companies have already built-up their inventory through imports. Lower natural rubber prices would bring down the raw material cost of tyre manufacturers, thereby boosting their profitability. Ceat Ltd, JK Tyre & Industries Ltd, MRF Ltd, Balkrishna Industries Ltd and Apollo Tyres Ltd are likely to benefit from the lower prices.

RSS4 grade closed at `.152 a kg at Kottayam, while National Multi Commodity Exchange December futures closed at `.152.97 a kg, January 2014 at `.154.95, February at `.157.49 and March 2014 at `.160.81 a kg. RSS3 grade closed at `.154.30 a kg at Bangkok and Malaysian SMR20 closed at `.141.85 a kg. While Tokyo Commodity Exchange, December futures series closed at ¥252.3 a kg, January 2014 at ¥251.5, February at ¥252.8, March at ¥254.1, April at ¥255.6 and the contract for delivery in May 2014 at ¥256.9 a kg. Tommorrow most probably market is expected to touch ¥259 tag for May delivery.

Selling pressure due to lack of buyers

Auto industry has been going through one of its worst periods in the last decade. Commercial vehicle growth there is a negative growth of 25% for the second successive year and the passenger car sales is just at the breakeven level as compared to last year. The automotive sector has been under tremendous pressure, with passenger vehicle sales declining 5% during the April-October 2013. US based auto maker Ford Motor is looking to make India its global manufacturing hub for small cars.

GDP had come down from 17% a few years ago to 14.6% at present, while the dream was to make manufacturing account for 25% of GDP by 2025. India's GDP growth rate in the quarter ended September 2013 is likely to be around 4.5%, compared to 4.4% growth registered in April-June quarter of 2013-14. World Bank President Jim Young Kim has said India was expected to have a good third quarter, which is in line with Finance Minister P Chidambaram's observations that the country's economy is now picking up.

Even a Rupee difference makes a substantial cost difference to the ultimate cost management of the product. So, the buyers continuously keep watching the markets both international and domestic and take appropriate decision at that point of time whether domestic rubber purchase is better or international rubber purchase. Absence of buyer from consuming sector and weak closing in the domestic futures market kept spot rubber market under pressure. Selling pressure from dealers and growers were visible, who fear further decline in prices is possible.

RSS4 grade closed at `.154 a kg at Kottayam, while National Multi Commodity Exchange December futures closed at `.153.83 a kg, January 2014 at `.155.70, February at `.158.20 and March 2014 at `.160 a kg. RSS3 grade closed at `.156.49 a kg at Bangkok and Malaysian SMR20 closed at `.144.87 a kg. While Tokyo Commodity Exchange, November futures series closed at ¥250 a kg, December at ¥252.8, January 2014 at ¥254, February at ¥256, March at ¥258.2 and the contract for delivery in April 2014 at ¥260 a kg.

What our readers say: http://rubber4u.com/Public/Views.pdf

Read lot more in Rubber4U – 1st December 2013 issue

Rubber4U

Rubber4U - 15th November 2013 issue

Protest march to parliament

Kerala Congress-M Ministers, MPs and MLAs is organising a Parliament March tomorrow against UPA government's import policy on natural rubber. Today, RSS4 grade closed at `.158 a kg at Kottayam, while National Multi Commodity Exchange November futures closed at `.157.17 a kg, December at `.159.26 and January 2014 at `.161.36 a kg.

Govt asked industry to work out details of NRP

The government of India has welcomed suggestion of having a national policy for rubber and is considering formulation of a national policy rubber on the lines of national policies for petroleum, textiles and IT. The development commissioner for rubber in the Ministry of Commerce J S Deepak has asked the industry to work out the details of national rubber policy (NRP).

RSS4 grade closed at `.157 a kg at Kottayam, while National Multi Commodity Exchange November futures closed at `.160.59 a kg, December at `.161.24 and January 2014 at `.163.32 a kg. RSS3 grade closed at `.158.08 a kg at Bangkok and Malaysian SMR20 closed at `.145.45 a kg. While Tokyo Commodity Exchange, November futures series closed at ¥248.5 a kg, December at ¥250.2, January 2014 at ¥251.9, February at ¥254.4, March at ¥256.6 and the contract for delivery in April 2014 at ¥258.6 a kg. On Wednesday most probably market is expected to be in green.

What our readers say: http://rubber4u.com/Public/Views.pdf

Read lot more in Rubber4U – 15th November 2013 issue

A positive outlook trend

Apollo Tyre and Cooper Tire & Rubber, deal landed in court last month over charges by the US company that its Indian suitor was delaying concluding the deal transaction. Apollo Tyre was pleased as the Delaware court had rejected contentions by Cooper Tire that the Indian company was in breach of its merger agreement with the US company to close the deal.

With a view to further liberalise the procedure relating to payments for exports/imports, Reserve Bank of India allows third-party payments for export, import transactions. Banks are allowed to receive payments for export of goods/software from a third-party and also permitted to make payments to a third-party for import of goods. Third-party refers to an entity other than the buyer or the seller. However, banks would have to follow certain conditions. Third-party transaction should take place through the banking channel and with a Financial Action Task Force (FATF) compliant country.

Rubber rebounded after Japan’s currency slid on U.S and Chinese data, boosting the appeal of yen-denominated futures. The yen traded near a seven-week low against the dollar. On Monday, Tokyo Commodity Exchange, November futures series closed at ¥247 a kg, December at ¥249.8, January 2014 at ¥251.5, February at ¥254, March at ¥257.4 and the contract for delivery in April 2014 at ¥259.4 a kg. While National Multi Commodity Exchange November futures were trading at `.157.50 a kg, December at `.158.79 and January 2014 at `.161.06 a kg at 12.35 IST. RSS3 grade closed at `.158.56 a kg at Bangkok and Malaysian SMR20 closed at `.144.91 a kg.

What our readers say: http://rubber4u.com/Public/Views.pdf

Read lot more in Rubber4U – 15th November 2013 issue

Lots of expectation in waiting

Top executives from Cooper Tire & Rubber Co. and Apollo Tyres Ltd. were testified in three-day trial held in Delaware's Chancery Court on Cooper's motion to force Apollo Tyres Ltd. to carry out its proposed $2.5 billion merger with Cooper Tire & Rubber Co. Apollo has said it is committed to the takeover, but not at the current price. The lack of financial information about the Chinese operation raises accounting questions; hence the Indian company alleged it cannot close the deal until it gets accurate, updated financial information from Cooper.

Natural rubber imports by China increased to 190,000 tonnes in October 2013, compared to 179,921 tonnes in September 2013 and 170,409 tonnes in October 2012. India’s natural rubber imports in October shoot up 81% to 33486 tonnes, while production, consumption and exports dropped 7.3%, 3.57% and 59% respectively on y-o-y. RSS4 grade closed at `.156.50 a kg at Kottayam, while National Multi Commodity Exchange November futures closed at `.155.90 a kg, December at `.157.08 and January 2014 at `.159.08 a kg. RSS3 grade closed at `.156.60 a kg at Bangkok and Malaysian SMR20 closed at `.143.39 a kg. As Japanese currency strengthened, it reduced the appeal of yen denominated contracts. Tokyo Commodity Exchange, November futures series closed at ¥245.3 a kg, December at ¥247.5, January 2014 at ¥250, February at ¥252.6, March at ¥255.2 and the contract for delivery in April 2014 at ¥256.9 a kg.

Read lot more in Rubber4U – 15th November 2013 issue