Rubber farmers to stage a protest rally

Thai government was trying to solve problems in the entire rubber system and the process would take time. It recently approved plans to use natural rubber to build roads and sports stadium floors to try to boost demand for local rubber and reduce market glut, while shoring up prices.

The network led by Saksarit Sriprasart announced that it would stage a mass protest rally on Friday, were in it is expected that more than 5,000 affected growers to attend the rally. Prime Minister Gen Prayut Chan-o-cha has urged the rubber planters to be patient while efforts are made to solve problems throughout the sector and has instructed the National Council for Peace and Order to negotiate with the rubber growers to find out their problems and demands.

If the reduction in petrol and diesel prices comes this week, it will be the 10th straight reduction in petrol prices since August and sixth in diesel since October. Global crude oil prices are currently hovering at $47 per barrel from the highs of $115 a barrel in June 2014.

The benchmark RSS4 grade rubber closed at `.126.70 a kg at Kottayam, while RSS3 grade closed at `.105.58 a kg at Bangkok and Malaysian SMR20 closed at `.86.63 a kg. On National Multi Commodity Exchange February 2015 futures closed at `.119.17 a kg, March at `.120.07 and April at `.121.61 a kg. On Tokyo Commodity Exchange, February 2015 futures series closed at ¥195 a kg, March at ¥197.8, April at ¥200.8, May at ¥201.6, June at ¥202.3 and the contract for delivery in July 2015 closed at ¥202.2 a kg.

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

For 2014-15 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Happy Republic Day

Market likely to be uncertain

The Society of Motor Manufacturers and Traders (SMMT) have reported that 1,528,148 cars were manufactured in the UK in 2014, the best figures since 2007.

On 20th January, International Monetary Fund reduced its global economic growth forecast for 2015 to 3.5% and 3.7% in 2017 on the back of weaker momentum in all major economies, stoking fresh fears about the strength of crude demand. US benchmark West Texas Intermediate (WTI) for February fell to US$45.59 a barrel, while Brent North Sea crude for delivery in March, the international benchmark, dropped to US$48.79 a barrel in London.

With this, synthetic rubber has become cheaper. The weaker yen also lent support to investor sentiment. The Tokyo Commodity Exchange rubber contract for June delivery closed at ¥198.9 a kg. There is no other strong fundamental reason to buy rubber now as the global economy is slowing.

China, world's second largest economy, reported its 2014 GDP growth at 7.4%, the lowest growth rate since 1990. Lack of demand and buying support from Chinese buyers was also a factor that would contribute to the market condition next week. Rubber market is likely to be uncertain and would adopt a wait and see attitude next week as there was no direction for the market.

The economic outlook has forced natural rubber prices to fall further, which would cause smallholders to stop tapping. If growers abandon the rubber trees, it will eventually affect natural rubber production.

The benchmark RSS4 grade rubber closed at `.125.35 a kg at Kottayam, while RSS3 grade closed at `.104.47 a kg at Bangkok and Malaysian SMR20 closed at `.86.74 a kg. On National Multi Commodity Exchange February 2015 futures closed at `.120.27 a kg, March at `.121.20 and April at `.121.77 a kg. On Tokyo Commodity Exchange, January 2015 futures series closed at ¥187 a kg, February at ¥192.4, March at ¥195.5, April at ¥198.2, May at ¥198.2 and the contract for delivery in June 2015 closed at ¥198.9 a kg. On Monday, most probably Tocom futures contract for delivery in June 2015 may trade in the range of ¥196 & ¥202 a kg.

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

For 2014-15 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

India Rubber Expo and Tyre Show 2015

8th India Rubber Expo and Tyre Show 2015,

held during 15-17th January 2015 

at Pragati Maidan, New Delhi, India. 

Rubber4U

Rubber4U - 15th January 2015 issue

Rubber slips down

The Tokyo Commodity Exchange hit a six-month high earlier this week due to worries about flooding across parts of rubber producing regions in Malaysia and Thailand, which reduced production in December, but weak demand especially in China and increasing inventories in major consumer nations continued to weigh on prices. The benchmark Tokyo rubber futures fell for a third session today, the contract for June delivery finished ¥4.2 lower at ¥205.3 per kg.

Rubber stocks in warehouses monitored by the Shanghai Futures Exchange also recovered to 154,086 tonnes, after falling to 136,531 tonnes in late November 2014. The most active rubber contract on Shanghai futures exchange for May delivery fell 240 yuan to finish at 13,200 yuan per tonne.

The benchmark RSS4 grade rubber closed at `.129.15 a kg at Kottayam, while RSS3 grade closed at `.107.63 a kg at Bangkok and Malaysian SMR20 closed at `.92.26 a kg. On National Multi Commodity Exchange January 2015 futures closed at `.122.75 a kg, February 2015 at `.123.79, March at `.123.65, April at `.125.10, May at `.126.30 and June at `.127.95 a kg. On Tokyo Commodity Exchange, January 2015 futures series closed at ¥189.1 a kg, February at ¥194.3, March at ¥199.1, April at ¥202.2, May at ¥204 and the contract for delivery in June 2015 closed at ¥205.3 a kg.

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

For 2014-15 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Improvement due to supports

The year 2015 may be an equally challenging one, the US Fed is determined to hike interest rates, which means a stronger dollar. There are possibilities of the Euro Zone sinking into deflation and Euro Zone’s inflation for December will be published on 7th January. Crude oil prices expected to remain depressed at least in the first quarter of the year.

To analyse the situation of the rubber and tyre industry in India, the parliamentary standing committee on commerce will tour West Bengal, Tripura and Kerala during January-February 2015. The standing committee will thereafter submit its report to the central government on the state of rubber and tyre industry with recommendations to increase production and growth of industry.

According to Rubber Board, two weeks after the announcement by Kerala government tyre companies lifted 2,400 tonnes of RSS4 grade natural rubber from the domestic market at `130.45 a kg. “We expect the market to improve in the coming days,” said Kerala Chief Minister and thanked the cultivators, tyre companies, dealers and all those who cooperated with the government’s rubber package.

Heavy rain in parts of Malaysia and Thailand are expected to have an adverse impact on production of natural rubber, which will result in supply shortage and in turn increase in prices. Rubber supplies in Thailand and Malaysia will contract by at least 100,000 tonnes a month if floods persist. Rubber has entered a bull market as flooding across Malaysia and parts of Thailand hurt supplies. Some rubber exporters are in talks with buyers to reschedule shipments because of rains.

The benchmark RSS4 grade rubber closed at `.130.75 a kg at Kottayam, while RSS3 grade closed at `.108.95 a kg at Bangkok and Malaysian SMR20 closed at `.96.39 a kg. On National Multi Commodity Exchange January 2015 futures closed at `.127.02 a kg, February 2015 at `.128.26 and March at `.128.50 a kg. On Tokyo Commodity Exchange, January 2015 futures series closed at ¥197.2 a kg, February at ¥203.3, March at ¥208, April at ¥210.7, May at ¥213 and the contract for delivery in June 2015 closed at ¥214.4 a kg.

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

For 2014-15 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf