Rubber4U

Rubber4U - 1st July 2015 issue

Rubber price expected to follow oil trend

International Crude Oil prices fell from US$115 a barrel last year to as low as US$45 a barrel in January this year, leading to a budget crunch in many Gulf countries. While Saudi Arabia and the UAE are seeing strong growth despite the price dives in Crude Oil. The International crude oil price of Indian Basket declined 1.17% to US$60.86 a barrel on 22nd June as against US$61.58 a barrel on 19th June. On Friday Brent crude for August was down 50 cents at $62.70 a barrel by 1345 GMT after ending the previous session down 29 cents. US crude was down 70 cents at $59.00 a barrel after finishing Thursday down 57 cents. There's a lot of crude oil that's trying to find a home, which limits the potential for a crude oil rally.

In a press note issued by the Rubber Board said the scheme for financial assistance for rubber planting/replanting is available for all regions, including traditional and non-traditional rubber growing areas. Considering the resources available in the first quarter of the year, the Board has invited applications from non-traditional and North-East regions.

Illegal money lending has flourished in Kerala because banking sector’s are reluctance to lend to small borrowers. Also, the guarantee requirement, extensive paperwork and delay make bank credit often inaccessible to the small borrowers. The Kerala government has revived Operation Kubera, the drive against illegal moneylenders like illegal lenders, kuries, chit funds, informal financial enterprises and unauthorised non-banking financial institutions.

The benchmark RSS4 grade rubber closed at `.130.50 a kg at Kottayam, while RSS3 grade closed at `.114.09 a kg at Bangkok and Malaysian SMR20 closed at `.98.60 a kg. On National Multi Commodity Exchange July 2015 futures closed at `.131.61 a kg, August at `.132.63 and September at `.133.53 a kg. Tokyo Commodity Exchange ended the week in negative, July 2015 futures series closed at ¥213.6 a kg, August at ¥215.7, September at ¥218 October at ¥220, November at ¥223.4 and the contract for delivery in December 2015 closed at ¥225.8 a kg.

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

Industry seeks govt intervention

Raising concern over the fall in rubber production for the third consecutive year, the tyre and rubber industries have sought urgent government intervention to stop the declining trend of domestic natural rubber production. Rubber consuming industries has pointed out that there was a significant decline in production of 11% in the first two months of the current fiscal. The fall in production comes on the heels of 16% drop in production in 2013-14 and 15% drop in 2014-15.

The benchmark RSS4 grade rubber closed at `.132.50 a kg at Kottayam, while RSS3 grade closed at `.116.58 a kg at Bangkok and Malaysian SMR20 closed at `.99.11 a kg. On National Multi Commodity Exchange July 2015 futures closed at `.134.55 a kg, August at `.135.78 and September at `.135.69 a kg. On Tokyo Commodity Exchange, June 2015 futures series closed at ¥214.2 a kg, July at ¥217.7, August at ¥220, September at ¥222.4 October at ¥224.4 and the contract for delivery in November 2015 closed at ¥227.5 a kg. On Tuesday, most probably Tocom futures contract for delivery in November 2015 may trade in the range of ¥226 & ¥229 a kg.

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

Supply is continuing to outstrip demand

Oil prices fell as the U.S. dollar rose and the energy market's focus shifted back to the global oversupply of crude. Oil benchmarks have rallied off their lows set in late March, but the recovery has lost steam, with prices trading in a narrow range around $60 a barrel since early May. It is very difficult to see how the massive oversupply situation is going to reverse in the short to medium term. The International crude oil price of Indian Basket declined 1.70% to US$ 61.76 a barrel on 15th June 2015 as against US$ 62.83 a barrel on 12th June 2015.

Weakening demand from the Chinese automotive sector and increased availability of supply seems to be snuffing out the recent recovery in natural rubber prices.

The Kerala government has approached the Centre seeking `.500 crore for providing assistance under the price support subsidy scheme to the struggling natural rubber growers. In this regard, state finance minister KM Mani, who met Union Finance Minister Arun Jaitley, has submitted a memorandum. The CPM staged dharnas in front of the district collectorates in protest against the fall in rubber prices and the exclusion of Kerala farmers from the subsidy scheme of the Rubber Board.

The benchmark RSS4 grade rubber closed at `.133 a kg at Kottayam, while RSS3 grade closed at `.129.50 a kg at Bangkok and Malaysian SMR20 closed at `.100.95 a kg. On National Multi Commodity Exchange July 2015 futures closed at `.135.04 a kg, August at `.135.95 and September at `.135.85 a kg. On Tokyo Commodity Exchange, June 2015 futures series closed at ¥216.3 a kg, July at ¥219, August at ¥221.3, September at ¥222.8 October at ¥225.1 and the contract for delivery in November 2015 closed at ¥228.4 a kg.

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

Rubber4U

Rubber4U - 15th June 2015 issue

Rubber settles lower before the ruling

Buying interest picked up this week because of lower prices, but growers are holding the stock for higher level of prices. Deal activity picked up in the physical rubber markets as a dip in prices after recent sharp gains attracted back buyers.

On Friday, Asian rubber prices settled lower due to losses in oil prices as well as a sharp decline in Shanghai rubber ahead of a key U.S ruling involving tyre imports from China. The U.S Department of Commerce (USDOC) today announced the final antidumping and countervailing duty margins to set out the tariffs that will be applied to unfairly traded imports of passenger vehicle and light truck tyre imports from China that benefited from subsidies or were dumped in the U.S. market. The antidumping margins announced by the USDOC on imports from China ranged from 14.35 to 87.99%. Countervailing duties on products from China range from 20.73 to 100.77%. If the U.S International Trade Commission (USITC) votes affirmatively in their upcoming injury determination, these rates will apply for the term of the relief.

Benchmark November natural rubber on the Tokyo Commodity Exchange settled 2.1% lower at ¥232.6 a kg. While benchmark natural rubber futures on the Shanghai Futures Exchange settled 2.8% lower.

The benchmark RSS4 grade rubber closed at `.131.50 a kg at Kottayam, while RSS3 grade closed at `.120.04 a kg at Bangkok and Malaysian SMR20 closed at `.101.55 a kg. On National Multi Commodity Exchange June 2015 futures closed at `.131.33 a kg, July at `.135.98, August at `.137.83 and September at `.137.64 a kg. On Tokyo Commodity Exchange, June 2015 futures series closed at ¥219 a kg, July at ¥220.1, August at ¥222.5, September at ¥225.1 October at ¥229 and the contract for delivery in November 2015 closed at ¥232.6 a kg.

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

Market to consolidate

The Goodyear Tire & Rubber Company announced that it has reached agreement with Sumitomo Rubber Industries, Ltd. (SRI) to dissolve the global alliance between the two companies.

Rubber futures on Tokyo Commodity Exchange have risen as much as 14% this year to a 16 month high, while the Japanese currency fell to a 12 year low (to 125.05 a dollar). Rubber buyers are getting a tough deal as a weaker yen compounds the pain of rising international prices.

Oil prices remained under pressure, despite bullish U.S oil inventory data and the decline was slightly below market expectations. Investors are keeping a close watch on the upcoming meeting of the Organization of the Petroleum Exporting Countries, with some concerns that a decision to maintain or even raise production quotas could accelerate a selloff by speculators. The international crude oil price of Indian Basket declined 0.85% to US$ 63.07 per barrel on 3rd June as against US$ 63.61 per barrel on 2nd June.

According to a study conducted by Rubber Research Institute of India (RRII), rising temperature levels are likely to affect the natural rubber yield in Kerala. The production of latex in rubber trees is closely related to the atmospheric temperature. Proper precautions and climate resilient measures may be adopted by the farmers to overcome the adverse effects of temperature.

The benchmark RSS4 grade rubber closed at `.130 a kg at Kottayam, while RSS3 grade closed at `.121.02 a kg at Bangkok and Malaysian SMR20 closed at `.102.61 a kg. On National Multi Commodity Exchange June 2015 futures closed at `.128.49 a kg, July at `.134.21 and August at `.135.21 a kg. On Tokyo Commodity Exchange, June 2015 futures series closed at ¥226.3 a kg, July at ¥227, August at ¥229.2, September at ¥231.8 October at ¥235.7 and the contract for delivery in November 2015 closed at ¥238.8 a kg. On Friday, most probably Tocom futures contract for delivery in November 2015 may trade in the range of ¥240 & ¥234 a kg.

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

Reduction in supply to support prices

Cambodian natural rubber prices rose by about 20% in May 2015 compared to May 2014 as a result of major producers reducing natural rubber supply to the international market.

The U.S. International Trade Commission will hold a meeting at its headquarters 9th June on the final phase of antidumping and countervailing duty investigations of passenger and light truck tyres imported from China.

The benchmark RSS4 grade rubber closed at `.128 a kg at Kottayam, while Malaysian SMR20 closed at `.103.77 a kg. On National Multi Commodity Exchange June 2015 futures closed at `.128.62 a kg, July at `.133.58 and August at `.134.52 a kg. On Tokyo Commodity Exchange, June 2015 futures series closed at ¥231.3 a kg, July at ¥232.1, August at ¥234.6, September at ¥236.8 October at ¥240.3 and the contract for delivery in November 2015 closed at ¥243.8 a kg. On Tuesday, most probably Tocom futures contract for delivery in November 2015 may trade in the range of ¥241 & ¥247 a kg.

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