Thursday, June 27, 2019

Lots of expectation on back of slowdown

Oil prices edged higher on expectations that OPEC will extend an output cut agreement, while investors awaited a meeting between the United States and China that could produce a breakthrough on trade talks. The OPEC meeting will follow the G20 summit this weekend.

For the second time in seven months, a gathering of the leaders at G20 meeting will be eclipsed by a sidelines meeting between Donald Trump and Xi Jinping, who will try to revive their countries’ stalled trade negotiations.

The U.S. and China appear to be making progress on trade talks ahead of the G20 meeting, but if the U.S. and China cannot come to an agreement and the trade fight escalates, oil prices could plunge to $30 per barrel, according to Bank of America Merrill Lynch. That is because the Trump administration has threatened to impose tariffs on $300 billion worth of Chinese imports, which would cover just about every Chinese good coming into the country. The economic pain on the global economy would be substantial.

U.S. President Donald Trump said he would be talking about trade with Indian Prime Minister when the two leaders sit down for a bilateral meeting on the sidelines of G20 summit meeting on Friday.

The benchmark RSS4 grade rubber closed at `.151 a kg at Kottayam, while RSS3 grade closed at `.140.83 a kg at Bangkok and Malaysian SMR20 closed at `.103.77 a kg. On ICEX, July 2019, the futures closed at `.150.84 a kg, August at `.145.52, September at `.147.69, October at `.149.16, November at `.150.66 and December closed at `.152.16 a kg. Tokyo Commodity Exchange July 2019 futures series closed at ¥234.5 a kg, August at ¥233.5, September at ¥221.9, October at ¥208.2, November at ¥199.2 and the contract for delivery in December 2019 closed at ¥194.6 a kg. On Friday, most probably Tocom futures contract for delivery in December may trade in the range of ¥189 & ¥195 a kg.

To read Rubber4U – 1st July 2019 issue:
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