TOCOM rubber hits 17 month high

Global crude oil prices are expected to remain volatile through the end of this year, following uncertainty over a production freeze by the Organization of the Petroleum Exporting Countries (OPEC). Today oil futures rallied after Russian president Vladimir Putin said the country would freeze its oil output and he sees a high probability that an agreement to curb oil production will be reached at the  30th November meeting of OPEC in Vienna. On the New York Mercantile Exchange, crude futures for delivery in December was trading at $47.30 a barrel and January Brent crude at $47.85 a barrel at 17.45 IST.

According to market sources, China Petroleum and Chemical Corp. (Sinopec), raised its ex-works butadiene offers in eastern China to Yuan 12,300/mt, or $1,494/mt on an import parity basis. Sinopec's price hikes follow bullishness in synthetic rubber markets after natural rubber futures rose.

The April 2017 natural rubber futures contract traded on the Tokyo Commodity Exchange hitting a 17 month high of ¥224.4 a kg, after touching a low of ¥211.6 a kg a earlier in the day. The most-active rubber contract on the Shanghai futures exchange for January delivery SNRcv1 surged 965 yuan to finish at 17,130 yuan (about $2,484) per tonne, the highest since June 2015.

The benchmark RSS4 grade rubber closed at `.125 a kg at Kottayam, while RSS3 grade closed at `.131.25 a kg at Bangkok and Malaysian SMR20 closed at `.118.35 a kg. On National Multi Commodity Exchange the last traded price for December 2016 futures was `.132.99 a kg, January 2017 at `.135.29 and February at `.138.83 a kg. Tokyo Commodity Exchange November 2016 futures series closed at ¥214.8 a kg, December at ¥215.8, January 2017 at ¥220, February at ¥221, March at ¥221.7 and the contract for delivery in April 2017 closed at ¥224.1 a kg.

To read Rubber4U – 1st December 2016 issue: http://rubber4u.com/Public/Abcd.pdf

For 2016-17 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

A positive outlook

Donald Trump has emerged as the 45th president of the United States of America. If Trump decides to implement his 15-point agenda, it could impact the India in several ways.

The UK manufacturing sector maintained a solid rate of expansion at the start of the final quarter of 2016, according to the latest CIPS Purchasing Managers’ Index (PMI). A major feature of the latest survey was the effect of the depreciation of the sterling exchange rate. Manufacturers reported that this aided efforts to increase inflows of new export business, resulting in new orders from the US, the European Union and China.

India is expected to push for a new approach to tariff cuts at the 16 country trade bloc to prevent China from flooding its market with cheap goods. The commerce department is working on ways to give minimum tariff concessions to Chinese goods and delay the concessions by a long number of years even as it allows imports from other member countries at lower duties.

International prices for natural rubber have climbed to a six-month high, with benchmark futures prices on the Tokyo Commodity Exchange up 40% from the recent low in August 2016. Today, Tocom contract for RSS3 rubber sheets for April 2017 delivery closed at ¥198.6 per kg. Synthetic rubber spot prices have been on an upward trend since August due to rising prices for the raw material butadiene, supporting push up the price of natural rubber. China is experiencing strong new car sales in the wake of cuts in vehicle taxes.

The Annual general body meeting of All Karnataka Rubber Planters Association (KRUPA) will be held at Jain Bhavan at Puttur-Karnataka on 11th November. The meeting will discuss and strive to mitigate woes of rubber growers' in Karnataka, which is going through a crisis with crash in price of natural rubber and also suffering from lack of support from the government. The association hopes that Rubber Board chairman - Ajith Kumar, who will inaugurate the conference will provide a vision and direction to the beleaguered rubber growers.

The benchmark RSS4 grade rubber closed at `.117.50 a kg at Kottayam, while RSS3 grade closed at `.120.40 a kg at Bangkok and Malaysian SMR20 closed at `.107.58 a kg. On National Multi Commodity Exchange November 2016 futures were trading at `.124.49 a kg, December at `.127.20, January 2017 at `.129.50 and February at `.132.31 a kg. Tokyo Commodity Exchange November 2016 futures series closed at ¥190.4 a kg, December at ¥192, January 2017 at ¥194.6, February at ¥195.4, March at ¥195.6 and the contract for delivery in April 2017 closed at ¥198.6 a kg.

To read Rubber4U – 15th November 2016 issue: http://rubber4u.com/Public/Abcd.pdf

For 2016-17 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf