Thursday, January 12, 2017

Rubber prices jump to 2-1/2 year high


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.

To read Rubber4U – 15th January 2017 issue: http://rubber4u.com/Public/Abcd.pdf
For 2016-17 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

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