Sunday, April 26, 2015

Market in a bullish mood


Tocom benchmark rubber futures will inch up on Monday, helped by higher oil and metals prices. After posting a second straight weekly gain, Tokyo Commodity Exchange rubber contract for October delivery is expected to trade in a positive range of ¥206 & ¥214 a kg. China is expected to bolster its cooling economy as its policymakers still have room to increase support and world no. 1 natural rubber supplier, Sri Trang Agro-Industry and other leading rubber producers in Asia plan to raise prices sharply, ditching a system of pegging them near the benchmark set by the SICOM exchange in Singapore.

The benchmark RSS4 grade rubber closed at `.121 a kg at Kottayam, while RSS3 grade closed at `.108.77 a kg at Bangkok and Malaysian SMR20 closed at `.89.22 a kg. On National Multi Commodity Exchange May 2015 futures closed at `.121.07 a kg, June at `.124.17 and July at `.126.15 a kg. On Tokyo Commodity Exchange, May 2015 futures series closed at ¥205.2 a kg, June at ¥206.3, July at ¥205.6, August at ¥205.4, September at ¥205.4 and the contract for delivery in October 2015 closed at ¥206 a kg.

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

Wednesday, April 22, 2015

Discussion for long-term negotiations


Major Asian natural rubber producers are set to charge a significant premium over the exchange-traded futures contract from the second half of 2015. The step could spur a recovery in global prices that have languished near their lowest since 2009. The producers are meeting with tyre manufacturers and other consumers today to negotiate directly with end-consumers instead of going through intermediary dealers. No. 1 rubber producer Sri Trang Agro-Industry Plc. move was similar to plans by another major rubber producer, Halcyon Agri Corp Ltd.

Benchmark rubber futures in Tokyo Commodity Exchange has risen nearly 6% to ¥205 per kg in the past three days. Crude oil prices after declining over 50% since last July also gained nearly 8% in the last five trading session. Increase in crude oil prices also kept the prices of synthetic rubber and other chemicals higher.

It is estimated that Indian tyre industry is expected to expand by 9-10% during 2015-16, but country’s auto industry ended the financial year 2014-15 on a subdued note with both passenger vehicle and two-wheeler segments reporting weak volume growth in March 2015. Following a 7.3% growth in 2013-14, tyre exports from India witnessed flat volume growth during April - December 2014, due to the subdued global auto demand and rising competition from Chinese tyre makers. Kerala State Finance Minister KM Mani has appealed to the Centre to hike the import duty on natural rubber besides seeking more funds for the price stabilisation fund.

Chinese buyers were scarce in the market, rubber dealers in Indonesia, Thailand and Malaysia said. A slowing economy in the world's top rubber importer has hurt industrial demand, prompting investors to scale back purchases of raw materials.

The benchmark RSS4 grade rubber closed at `.119.50 a kg at Kottayam, while RSS3 grade closed at `.105.91 a kg at Bangkok and Malaysian SMR20 closed at `.87.65 a kg. On National Multi Commodity Exchange May 2015 futures closed at `.121.54 a kg, June at `.124.04 and July at `.124.23 a kg. On Tokyo Commodity Exchange, April 2015 futures series closed at ¥205 a kg, May at ¥204.1, June at ¥204.9, July at ¥204.4, August at ¥204.5 and the contract for delivery in September 2015 closed at ¥204.7 a kg. On Thursday, most probably Tocom futures contract for delivery in September 2015 may trade in the positive range of ¥203 & ¥209 a kg.

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