Rubber4U

Rubber4U - 1st January 2016 issue

Gloomy year comes to an end with little sparkle

After plunging 48% in 2014, the crude oil price has fallen another 36% since the end of last year. Rubber product makers and exporters may continue to see growth as natural rubber prices may continue to stay low because of low crude oil prices.

Global demand for natural rubber is slowing as the economy cools in China. Supplies are expanding after a decade-long rally in rubber prices to a record in 2011 encouraged top producers like Thailand, Indonesia and Vietnam to plant more trees. Output will exceed use for two more years, with the surplus quadrupling in 2016. Global production is set to exceed demand by 411,000 tonnes next year and by 430,000 tonnes in 2017, compared with a surplus of 98,000 tonnes in 2015, according to The Rubber Economist Ltd., a London based industry researcher.

Rubber traded in Tokyo has tumbled 71% from a record in 2011, touching a six-year low of ¥153 a kg on 6th November 2015. Tokyo rubber prices climbed more than 14% to 174.8 yen at the beginning of December from a six-year low of ¥153 a kg. The Tokyo Commodity Exchange rubber dropped to a one-month low on 29th December, stretching its losses into a fourth consecutive session, as slowing demand from top consumer China and weakness in crude oil.

Crude oil prices still remained under pressure on fears of slowing demand added to worries over near-record global production levels. Natural rubber prices often follow moves in crude oil as the commodity competes with synthetic rubber and the market is concerned about slowing economic growth in China.

United Planters Association of Southern India (UPASI) has said cheap imports are harming the rubber industry. It wants the government to introduce safeguards to protect domestic players. "With damage to domestic industry being evident, government should play its role as regulator and introduce safeguards to limit imports. The recommendations of the Parliamentary Standing Committee on the rubber industry in India have clearly stated that uncontrolled imports are harming the growing domestic industry," said Dharmaraj, president of UPASI.

The benchmark RSS4 grade rubber closed at `.102.50 a kg at Kottayam, while RSS3 grade closed at `.79.94 a kg at Bangkok and Malaysian SMR20 closed at `.75.60 a kg. On National Multi Commodity Exchange January 2016 futures closed at `.103.91 a kg, February at `.105.70 and March closed at `.108.04 a kg. On Tokyo Commodity Exchange, January 2016 futures series closed at ¥147.3 a kg, February at ¥149.9, March at ¥153.1, April at ¥166.6, May at ¥157.7 and the contract for delivery in June 2016 closed at ¥159 a kg. It is definitely going to be an interesting year in 2016 in terms of the economy and financial markets.

To read Rubber4U – 1st January 2016 issue: http://rubber4u.com/Public/Abcd.pdf for latest forecast

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

Rubber4U

Rubber4U - 15th December 2015 issue

NR output and imports down

Natural rubber imports in November 2015 dropped nearly -13.72% to 32,308 tonnes from 37,445 tonnes in November 2014. Import of natural rubber was mainly from Indonesia, Thailand, Vietnam and Malaysia.

Natural rubber production for the month of November 2015 decreased by 16.67% to 50,000 tonnes compared to 60,000 tonnes during November 2014. While the consumption during the month decreased by 3.87% to 82,000 tonnes compared to 85,300 tonnes during the same period of 2014.

The benchmark RSS4 grade rubber closed at `.103 a kg at Kottayam, while RSS3 grade closed at `.86.33 a kg at Bangkok and Malaysian SMR20 closed at `.77.53 a kg. On National Multi Commodity Exchange December 2015 futures closed at `.100.27 a kg, January 2016 at `.101.80, February at `.102.18 and March closed at `.103.69 a kg. On Tokyo Commodity Exchange, December 2015 futures series closed at ¥157.8 a kg, January 2016 at ¥161.3, February at ¥162.4, March at ¥164.9, April at ¥166.5 and the contract for delivery in May 2016 closed at ¥168 a kg.

To read Rubber4U – 15th December 2015 issue: http://rubber4u.com/Public/Abcd.pdf

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

Visit Us at Rubber World Expo 2015 at B-34, BEC, Goregaon-Mumbai, India.

Demand to regulate rubber imports

The persistent fall in the prices in the past two years had caused concern among rubber growers in Kerala. Kerala government has asked Centre to regulate import of natural rubber and hike excise duty to check its falling prices in domestic market. Recently, Kerala government had introduced a support scheme whereby small-scale rubber growers would get an assured price of `.150 per kg. The State government's commitment towards this scheme would come to around `.300 crore in the current fiscal and it would go up to `.500 crore next year.

The problem of low-cost imports is putting at risk the entire ‘Make in India’ clarion call by the Indian government. According to Mohinder Gupta, president of All India Rubber Industries Association, much higher import duties on raw materials such as natural and synthetic rubbers than on finished rubber goods have impacted the export competitiveness of the rubber sector in India. Import duty should be zero for the rubber and raw materials not being manufactured in the country. The proposed national rubber policy is still a work-in-progress. The meetings of the working group formed for framing national rubber policy are over. Different stakeholders have made their submissions. We have requested the government to come out with the policy as soon as possible.

Through bilateral friendly consultations in Thailand, Sinochem and Rubber Authority of Thailand (RAOT) signed a purchase agreement of 200,000 tonnes of natural rubber, which is the largest order in 2015.

The benchmark RSS4 grade rubber closed at `.105 a kg at Kottayam, while RSS3 grade closed at `.85.34 a kg at Bangkok and Malaysian SMR20 closed at `.77.97 a kg. On National Multi Commodity Exchange December 2015 futures closed at `.105.38 a kg, January 2016 at `.105.49 and February closed at `.106.16 a kg. On Tokyo Commodity Exchange, December 2015 futures series closed at ¥161.8 a kg, January 2016 at ¥165.1, February at ¥167.3, March at ¥169, April at ¥169.8 and the contract for delivery in May 2016 closed at ¥170.7 a kg.

To read Rubber4U – 15th December 2015 issue: http://rubber4u.com/Public/Abcd.pdf

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

Visit Us at Rubber World Expo 2015 at B-34, BEC, Goregaon-Mumbai, India.

Little relief but still in crisis

Rubber growers in Kerala were bearing the brunt of rubber imports, leading to a fall in price in the domestic market. Today during the Zero Hour, Lok Sabha MPs from Kerala backed the Congress leader Anto Antony’s demand for immediate intervention from the Centre to arrest rising imports of natural rubber. Home Minister Rajnath Singh assured the agitated MPs that he would take up the matter with the Minister concerned.

U.S. manufacturing contracted in November for the first time in three years as the sector buckled under the weight of a strong dollar and deep spending cuts by energy firms, but robust automobile sales suggested the economy remained on solid ground.

An industry survey showed Manufacturing activity in China hit a three year low in November, supporting the case for more accommodative policies as authorities seek to prop up growth.

While benchmark TOCOM rubber futures hit a 6 week high on Thursday, helped by an overnight jump in Shanghai futures and as investor’s unwound short positions on the view that prices may be bottoming out.

Today the benchmark RSS4 grade rubber closed at `.105 a kg at Kottayam, while RSS3 grade closed at `.85.34 a kg at Bangkok and Malaysian SMR20 closed at `.77.97 a kg. On National Multi Commodity Exchange December 2015 futures closed at `.104.88 a kg, January 2016 at `.104.84, February at `.105.16 and March closed at `.106.02 a kg. On Tokyo Commodity Exchange, December 2015 futures series closed at ¥161.8 a kg, January 2016 at ¥165.1, February at ¥167.3, March at ¥169, April at ¥169.8 and the contract for delivery in May 2016 closed at ¥170.7 a kg. On Friday, most probably Tocom futures contract for delivery in May 2016 may trade in the range of ¥168 & ¥172 a kg.

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

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

Visit Us at Rubber World Expo 2015 at B-34, BEC, Goregaon-Mumbai, India.

Rubber4U

Rubber4U - 1st December 2015

RubberTech Expo 2015

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Rubber4U at RubberTech Expo 2015

Rubber4U

Rubber4U - 15th November 2015 issue

Festive season Dhamaka

The government of India on 10th November eased Foreign Direct Investment (FDI) norms in 15 major sectors to boost growth and increase investment. It also raised Foreign Investment Promotion Board (FIPB) approval limit to `.5000 crore from `.3000 crore. 100% FDI allowed in plantation of rubber, coffee, cardamom, palm oil tree and olive oil tree. These decisions come into force with immediate effect.

After a gap of about two years, sales of light commercial vehicles recorded an uptick in October on the back of improved economic activity. Overall, sales of commercial vehicles grew by 12.73% in October and by 8.02% during April-October 2015. Strong demand during the festive season pushed up sales of passenger vehicles by 21.46%.

Society of Indian Automobile Manufacturers, director general - Vishnu Mathur said, sales of commercial vehicles are reflecting a revival in the economy. We see demand for the light commercial vehicles coming back. We expect commercial vehicle segment to scale peak level by first half of next year. Festival season has brought in cheer to the auto industry as sales have risen across categories during October.

India’s natural rubber production for the month of October 2015 decreased by 10.91% to 49,000 tonnes compared to 55,000 tonnes during October 2014. While consumption of natural rubber during the month has increased by 4.88% to 86,000 tonnes compared to 82,000 tonnes in October 2014.

Today the benchmark RSS4 grade rubber closed at `.111 a kg at Kottayam, while RSS3 grade closed at `.82 a kg at Bangkok and Malaysian SMR20 closed at `.78.89 a kg. On National Multi Commodity Exchange November 2015 futures closed at `.110.50 a kg, December at `.108.27, January 2016 at `.108.84 and February closed at `.109.03 a kg. On Tokyo Commodity Exchange, November 2015 futures series closed at ¥132.8 a kg, December 2015 at ¥151.4, January 2016 at ¥154.3, February at ¥157, March at ¥158.3 and the contract for delivery in April 2016 closed at ¥159.2 a kg. On Thursday, most probably Tocom futures contract for delivery in April 2016 may trade in the range of ¥162 & ¥155 a kg.

To read Rubber4U – 15th November 2015 issue: http://rubber4u.com/Public/Abcd.pdf

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

Visit Us at RubberTech Expo 2015 at A-45, BEC, Goregaon-Mumbai, India.

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

Rubber4U

Rubber4U - 15th September 2015 issue

Rubber growers worried

According to news report, China plans to launch a Yuan denominated international benchmark for crude oil futures this year. The contract will be traded at the Shanghai International Energy Exchange and will be a price reference for medium sour crude, a variety preferred by Asian players. While Iran has reduced the quarterly price for its flagship crude to the lowest in three years in a bid to lure Asian buyers. The price reduction is just one of the steps taken by the OPEC producer to ramp up output and regain market share lost since U.S and European sanctions aimed at its nuclear program.

The All Rubber Planters’ Association has expressed concern over reduction in the tapping activities, due to fall in the rubber price. The tapping has come down by 30 to 40% in recent times and has demanded that the government hike the import duty on natural rubber to protect the domestic growers.

There are around 2 lakh hectares of land is available for expansion in Karnataka, of this, around 55,000 growers in the State have ventured into rubber cultivation on an area of around 50,000 hectares of land. They produce around 40,000 tonnes of natural rubber a year. With the crash in the prices of natural rubber, tapping of rubber from trees has come down by almost 40% during the year. While the re-planting in old rubber plantations has been stopped now, expansion of rubber crop in new areas has also come down drastically, said P Gopalakrishna Bhat, secretary of the association.

A seminar of rubber growers of Karnataka will be held at Jain Bhavan, Bypass Road, Puttur in Dakshina Kannada on 11th September at 11 am, to discuss and mitigate the woes of rubber growers. The seminar will be inaugurated by district minister B Ramanath Rai.

Today the benchmark RSS4 grade rubber closed at `.112 a kg at Kottayam, while RSS3 grade closed at `.90.78 a kg at Bangkok and Malaysian SMR20 closed at `.83.50 a kg. On National Multi Commodity Exchange September 2015 futures closed at `.113.86 a kg, October at `.113.17, November at `.113.09 and December closed at `.112.92 a kg. On Tokyo Commodity Exchange, September 2015 futures series closed at ¥160.7 a kg, October at ¥164.8, November at ¥166.5, December 2015 at ¥169.9, January 2016 at ¥171.8, and the contract for delivery in February 2016 closed at ¥172.9 a kg. On Friday, most probably Tocom futures contract for delivery in February 2016 may trade in the range of ¥175 & ¥179 a kg.

To read Rubber4U – 15th September 2015 issue: http://rubber4u.com/Public/Abcd.pdf

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

NR output up, import down

Crude oil prices remained steady but at low levels as concerns remained that high global production was being met by increasingly slowing demand. Oil prices have fallen almost 60% since June 2014 on a global supply glut, while production remained near record highs.

In India, natural rubber production rose 7.8% in August to 55,000 tonnes compared to 51,000 tonnes during August 2014, while consumption grew to 87,500 tonnes from 86,300 tonnes in August 2014. Natural rubber imports fell 32% to 33,292 tonnes, compared to same period of 2014.

During the April-August 2015 period, natural rubber production fell 11% to 2.42 lakh tonnes from 2.72 lakh tonnes during same period of 2014. Consumption declined by 1.7% to 418,080 tonnes from 425,285 tonnes. Imports decreased to 178,756 tonnes from 192,966 tonnes. However, exports grew to 194 tonnes during April-August 2015 from 184 tonnes in the same period of 2014.

Today the market was in positive trend and can expect the same tomorrow also. The benchmark RSS4 grade rubber closed at `.112 a kg at Kottayam, while RSS3 grade closed at `.90.72 a kg at Bangkok and Malaysian SMR20 closed at `.84.99 a kg. On National Multi Commodity Exchange September 2015 futures closed at `.113.68 a kg, October at `.113.58, November at `.113.47, December at `.113.33 and January 2016 closed at `.113 a kg. On Tokyo Commodity Exchange, September 2015 futures series closed at ¥162.9 a kg, October at ¥166.2, November at ¥168.1, December 2015 at ¥171, January 2016 at ¥173.4, and the contract for delivery in February 2016 closed at ¥174.3 a kg. On Thursday, most probably Tocom futures contract for delivery in February 2016 may trade in the range of ¥169 & ¥176 a kg.

To read Rubber4U – 15th September 2015 issue: http://rubber4u.com/Public/Abcd.pdf

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

Rubber Forecast for 2015-16

Rubber4U

Rubber4U - 1st September 2015 issue

TOCOM rubber falls to 10 month low as oil slump

Current oil prices have dropped dramatically in the last few months. According to Citigroup report, US oil prices may plummet to a new 11 year low of $33 a barrel or lower this year. While in 2008, during the global financial crisis US crude traded at a low of $30.28 a barrel. West Texas Intermediary crude closed at $38.24 a barrel on Monday. The international benchmark, Brent crude, was also down and closed at $42.69 a barrel. The slump is helping oil importers but hurting producers and all over the world it is holding back the inflation that is needed to justify an increase in interest rates.

Lower prices of oil and equity markets as well as the yen’s rise against the U.S dollar all added to the pressure. Natural rubber accounts for the second largest commodity import to the US after petroleum and it’s one of the top five natural rubber importers globally. In terms of overall sustainability, guayule is a multi-use, zero waste crops. After the rubber is extracted, the leftover biomass can be used as fuel or to extract biochemicals.

The benchmark RSS4 grade rubber closed at `.113 a kg at Kottayam, while RSS3 grade closed at `.93.46 a kg at Bangkok and Malaysian SMR20 closed at `.81.99 a kg. On National Multi Commodity Exchange September 2015 futures closed at `.111.46 a kg and October at `.111.55 a kg. On Tokyo Commodity Exchange, August 2015 futures series closed at ¥165.5 a kg, September at ¥166.9, October at ¥170, November at ¥172.1, December 2015 at ¥173.8 and the contract for delivery in January 2016 closed at ¥175.1 a kg. On Tuesday, most probably Tocom futures contract for delivery in January 2016 may trade in the range of ¥165 & ¥176 a kg.

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

Once again rubber at its eight month low

The recent devaluation of the yuan was aimed at helping Chinese exporters, but it would hurt the country's importers or reduce demand for imports of commodities including rubber. According to Rubber Trade Association of Japan data, the crude rubber inventories at Japanese ports stood at 16,241 tonnes as of 31st July, up by 18.3% from the last inventory date. The benchmark Tokyo Commodity Exchange (TOCOM) rubber futures fell to an 8 month low on Tuesday, tracking a drop in Shanghai futures and persistent worries over weakening demand for rubber in China and also gloomy outlook due to fall in oil prices. The TOCOM rubber contract for January delivery finished at ¥186.9 a kg. Earlier the price fell to a low of ¥189.7 a kg, the lowest since 11th December 2014. Rubber price is further expected to go down.

The benchmark RSS4 grade rubber closed at `.116.50 a kg at Kottayam, while RSS3 grade closed at `.97.14 a kg at Bangkok and Malaysian SMR20 closed at `.85.60 a kg. On National Multi Commodity Exchange September 2015 futures closed at `.114.21 a kg and October at `.114.20 a kg. On Tokyo Commodity Exchange, August 2015 futures series closed at ¥177.2 a kg, September at ¥179.2, October at ¥181.6, November at ¥183.6, December 2015 at ¥185.8 and the contract for delivery in January 2016 closed at ¥186.9 a kg. On Wednesday, most probably Tocom futures contract for delivery in January 2016 may trade in the range of ¥180 & ¥186 a kg.

To read Rubber4U – 15th August 2015 issue: http://rubber4u.com/Public/Abcd.pdf

Rubber4U

Rubber4U - 15th August 2015 issue

Market outlook not so good

A slump in the prices of crude oil deepened following the release of Chinese trade data that appeared to confirm market expectations that demand will remain slack. The market is also concerned about demand in Europe and that a possible rise in US interest rates this year could lift the value of the US dollar, which would raise the cost of commodity imports for many buyers around the world.

Spot rubber continued to remain almost unchanged with RSS4 closing at `.118.50 a kg. Domestic market sentiment has been bearish for long due to lukewarm demand from tyre manufactures and weakness in crude oil prices.

According to the data released by the Rubber Board, the production in July 2015 stood at 52,000 tonnes, 3.7% lower than the output in the same month of previous year. However, the overall deficit in production for the period April to July 2015 came to 14.03% at 190,000 tonnes. As tyre manufacturers trimmed imports expecting a further fall in rubber prices, India's natural rubber imports in July dropped 14.62% to 36,828 tonnes. Natural rubber stock increased by 19.79% in July when compared to same month of 2014.

The benchmark RSS4 grade rubber closed at `.118.50 a kg at Kottayam, while RSS3 grade closed at `.99.64 a kg at Bangkok and Malaysian SMR20 closed at `.85.66 a kg. On National Multi Commodity Exchange August 2015 futures closed at `.117.39 a kg, September at `.116.80 and October at `.116.61 a kg. On Tokyo Commodity Exchange, August 2015 futures series closed at ¥185.8 a kg, September at ¥188.8, October at ¥191.7, November at ¥193.4, December 2015 at ¥195.3 and the contract for delivery in January 2016 closed at ¥196.7 a kg. On Tuesday, most probably Tocom futures contract for delivery in January 2016 may trade in the range of ¥194.2 & ¥200 a kg.

To read Rubber4U – 15th August 2015 issue: http://rubber4u.com/Public/Abcd.pdf

Tommorrow wait and watch

The global economy is experiencing serious disruption. U.S WTI benchmark crude oil prices fell by 20% in July, the biggest monthly fall since October 2008, while Brent crude oil prices, the international benchmark, fell by 18%, the biggest monthly fall since December 2014. The collapse in crude oil prices has now adversely affected coal as well. India’s macroeconomic situation, however, is better. Low oil prices have greatly moderated inflation, though many items of daily consumption are experiencing price rise.

Inflation measured by the wholesale price index inflation (WPI) has remained negative for the past eight consecutive months and stood firm at negative 2.4% in June. The consumer price index (CPI) remained lower than RBI’s guided path target of 6%. RBI in its second bimonthly monetary policy in June had cut policy (repo) rates by 25 basis points, the third bimonthly credit policy review scheduled for 4th August and one has to wait and see whether there will be a rate cut or not. Since the economy is weak, we expect repo rate to be unchanged. RBI would rather hold the rates and wait for the next policy because there is no clarity.

The benchmark RSS4 grade rubber closed at `.120 a kg at Kottayam, while RSS3 grade closed at `.101.26 a kg at Bangkok and Malaysian SMR20 closed at `.87.56 a kg. On National Multi Commodity Exchange August 2015 futures closed at `.118.15 a kg, September at `.118.05 and October at `.117.51 a kg. On Tokyo Commodity Exchange, August 2015 futures series closed at ¥186.7 a kg, September at ¥189.5, October at ¥191.7, November at ¥193.4, December 2015 at ¥195.3 and the contract for delivery in January 2016 closed at ¥197.4 a kg. On Tuesday, most probably Tocom futures contract for delivery in January 2016 may trade in the range of ¥192 & ¥198 a kg.

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

Rubber4U

Rubber4U - 1st August 2015 issue

Trend may continue to next week

The key $50 price support for WTI oil has been broken (US$48.14 a barrel). Crude oil is struggling for any upside gain and experienced another depraved week as the inventory data reminding about the extra oil glut on the market. Chinese, world’s second-largest consumer of oil, disappointed markets with its manufacturing data. Will the current downturn be as severe as the one in 1986 and the current curve of oil prices is suggesting that there will be little recovery in the coming years.

Benchmark Tokyo rubber futures decline in two weeks, dragged lower by weak Shanghai futures following sluggish Chinese factory activity data. Tokyo Commodity Exchange futures, which set the tone for tyre rubber prices also came under pressure from oil prices closing at their lowest in months a day earlier. National Multi Commodity Exchange (NMCE) Rubber August contract traded with bearish sentiments on selling pressure from traders and this trend is likely to continue in next trading session as well.

The benchmark RSS4 grade rubber closed at `.124.50 a kg at Kottayam, while RSS3 grade closed at `.106.02 a kg at Bangkok and Malaysian SMR20 closed at `.90.79 a kg. On National Multi Commodity Exchange August 2015 futures closed at `.123.05 a kg, September at `.123.23 and October at `.123.05 a kg. On Tokyo Commodity Exchange, July 2015 futures series closed at ¥200 a kg, August at ¥198.5, September at ¥200.5, October at ¥203.3, November at ¥206.1 and the contract for delivery in December 2015 closed at ¥208.6 a kg.

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

Rubber stable as oil price dips

U.S oil prices dipped below $50 a barrel Monday for the first time since April on continued concerns that global crude oil supplies are overwhelming demand. US August crude, set to expire on Tuesday, fell 74 cents to settle at US$50.15 on Monday, having fallen to US$49.85, its first time below US$50 since April. Oil prices steadied on Tuesday and closed at $50.36 a barrel, helped by a dip in the dollar.

Versalis Pacific Trading (Shanghai), a 100% subsidiary of Versalis (Eni), a major producer in the polymers and elastomers industry, announced to have signed an Styrene Butadiene Rubber sales agreement with Reliance Industries Ltd. to commercialise the rubber produced by Reliance in the new plant.

The benchmark RSS4 grade rubber closed at `.125 a kg at Kottayam, while RSS3 grade closed at `.107.03 a kg at Bangkok and Malaysian SMR20 closed at `.93.07 a kg. On National Multi Commodity Exchange August 2015 futures closed at `.126.07 a kg, September at `.126.03 and October at `.125.02 a kg. On Tokyo Commodity Exchange, July 2015 futures series closed at ¥200.8 a kg, August at ¥204.1, September at ¥207, October at ¥209.8, November at ¥212.2 and the contract for delivery in December 2015 closed at ¥214.9 a kg. On Wednesday, most probably Tocom futures contract for delivery in December 2015 may trade in the range of ¥218 & ¥212 a kg.

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

Rubber4U

Rubber4U - 15th July 2015 issue

NR Production & consumption down in June

West Texas Intermediate for August delivery fell 4 cents to end at $52.74 a barrel on the New York Mercantile Exchange. Prices slid 7.4% this week. While Brent for August settlement rose 12 cents to $58.73 a barrel on the London based ICE Futures Europe exchange, down 2.6% this week. The International Energy Agency has forecast global oil demand growth to slow to 1.2 million barrels a day in 2016, compared to an average of 1.4 million barrels a day this year.

Benchmark TOCOM rubber futures extended losses during the week, as weaker oil prices and worries about slumping Shanghai futures prompted investors to unwind long positions.

In June 2015, natural rubber production in India fell by 20.63% to 50,000 tonnes from 63,000 tonnes, while consumption also dropped by 3.85% to 82,000 tonnes from 85,285 tonnes in July 2014. Natural rubber imports in July marginally increased by 0.69% to 33,606 tonnes from a year earlier.

The benchmark RSS4 grade rubber closed at `.125 a kg at Kottayam, while RSS3 grade closed at `.105.29 a kg at Bangkok and Malaysian SMR20 closed at `.92.15 a kg. On National Multi Commodity Exchange July 2015 futures closed at `.123.69 a kg, August at `.125.12 and September at `.124.98 a kg. Tokyo Commodity Exchange ended the week in negative, July 2015 futures series closed at ¥197 a kg, August at ¥199.6, September at ¥203.8, October at ¥206.2, November at ¥208.4 and the contract for delivery in December 2015 closed at ¥211 a kg.

To read Rubber4U – 15th July 2015 issue: http://rubber4u.com/Public/Abcd.pdf

Kerala govt. to implement minimum price scheme

The price stability fund announced by Kerala state in its budget for this year with the aim of giving relief to rubber farmers, has decided to implement a project that will utilize the price stability fund of `.300 crore and ensure that small farmers get a minimum price of `.150 per kg for rubber. The farmers who register in the project, will get the difference in the market price of rubber published every day. Subsidy will be given for a maximum of two hectares having rubber cultivation. A maximum of 1800 kg for a hectare will get the benefit. Subsidy would be provided on the basis of the report submitted by the field officer. The amount will be credited to the account of the farmers once in every two weeks.

The decision has been taken yesterday at a meeting attended by Chief Minister Oommen Chandy and Finance Minister K M Mani with a sub-committee set up for the purpose. While Agriculture organisations have announced their total support for the project.

Spot rubber continued to rule unchanged, though market seemed to be suffering from acute short supplies. The benchmark RSS4 grade rubber closed at `.129.50 a kg at Kottayam, while RSS3 grade closed at `.109.36 a kg at Bangkok and Malaysian SMR20 closed at `.94.99 a kg. On National Multi Commodity Exchange July 2015 futures closed at `.130.04 a kg, August at `.131.27 and September at `.130.65 a kg. Tokyo Commodity Exchange ended the week in negative, July 2015 futures series closed at ¥207.3 a kg, August at ¥209.6, September at ¥212.8 October at ¥214.9, November at ¥217.9 and the contract for delivery in December 2015 closed at ¥221.1 a kg. On Friday, most probably Tocom futures contract for delivery in November 2015 may trade in the range of ¥224 & ¥215 a kg.

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

Rubber4U

Rubber4U - 1st July 2015 issue