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.
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