Rubber industry looks set for a turnaround as
international rubber prices continue their strong rebound. Domestic traders and
industry officials said yesterday they were optimistic that rubber prices,
which increased over 59% since 5th February 2016, would continue to rise as the
global economy recovers and demand driven heavily by developing economies
catches up with supply.
Benchmark TOCOM rubber futures rallied to
their highest in nearly four years, extending gains into a third session,
boosted by supply concerns after flooding hit in Thailand. Natural rubber
prices in India jumped to a two-and-a-half-year high today on limited supplies
and tracking gains in international markets due to supply disruptions in
Thailand. Now domestic growers are delaying selling expecting further rise in
prices. The rally in overseas markets is also boosting sentiment.
The price rise would increase the raw
material cost of tyre makers, thereby putting pressure on their profit margin,
as natural rubber makes up more than 40% of the cost of a tyre.
The benchmark RSS4 grade rubber closed at `.145
a kg at Kottayam, while RSS3 grade closed at `.175.49 a kg at
Bangkok and Malaysian SMR20 closed at `.151.73 a kg. On
National Multi Commodity Exchange the last traded price for January 2017 futures
was `.144.68 a kg, February at `.148.32, March at `.153.44,
April at `.159.64 and May at `.166.78 a kg. Tokyo
Commodity Exchange January 2017 futures series closed at ¥299.5 a kg, February
at ¥300.9, March at ¥299.5, April at ¥296.8, May at ¥297.8 and the contract for
delivery in June closed at ¥299 a kg. On Friday, most probably Tocom futures
contract for delivery in June 2017 may trade in the range of ¥292 & ¥298 a
kg.
For 2016-17 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf
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