NR prices and production up

Uptrend in natural rubber production continues and in the month of December 2016 production increased by 12.07%, compared to the production during the same period of 2015. In December 2016, the output has surged to 65,000 tonnes compared to 58,000 tonnes in the same month in 2015. Total natural rubber production during April-December 2016 is 4,93,000 tonnes whereas it was 4,40,000 tonnes in 2015, showing 12.05% increase.

The Indian Rubber Board has developed an online system for applying for licences issued to manufacturers, dealers and processors as well as for filing returns. This system, as a part of the ongoing e-governance programme of the Board was launched by A. Ajith Kumar IAS, executive director of Rubber Board. The solution named ‘RUBIS’ had been deployed at the web address www.rbegp.in, which can also be accessed from the website of the Board.

The benchmark RSS4 grade rubber closed at `.156 a kg at Kottayam, while RSS3 grade closed at `.195.69 a kg at Bangkok and Malaysian SMR20 closed at `.156.96 a kg. On National Multi Commodity Exchange the last traded price for February 2017 futures was `.159.17 a kg, March at `.166.34, April at `.173.66 and May at `.178.02 a kg. Tokyo Commodity Exchange February 2017 futures series closed at ¥347 a kg, March at ¥339.1, April at ¥333.2, May at ¥333.7, June at ¥333 and the contract for delivery in July closed at ¥331.3 a kg.

To read Rubber4U – 1st February 2017 issue: http://rubber4u.com/Public/Abcd.pdf

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

Market cautiously optimistic

While addressing the inauguration of India Rubber Expo 2017, KM Mammen, chairman of Automotive Tyre Manufacturers Association and chairman & managing director of MRF Ltd., said Make in India is a powerful incentive for Indian tyre makers not just to expand in the Indian market, but also manufacture quality tyres locally for exports to other markets.

The Reserve Bank of India is working on a plan to reduce online transaction costs as it tries to encourage more digital banking. While based on the recommendations made by domestic oil producers, finance minister Arun Jaitley is likely to cut the cess on domestic crude oil, an announcement which is expected in the Union Budget 2017-18.

The outlook for rubber is expected to improve this year amid the gradual global recovery. But the market seems cautiously optimistic on the commodity's fundamental outlook. According to the Rubber Authority of Thailand, as a result of the floods, country’s natural rubber output is expected to fall by 7.6% this year to 4.38 million tonnes, down from the 4.74 million tonnes previously expected.

The benchmark RSS4 grade rubber closed at `.150 a kg at Kottayam, while RSS3 grade closed at `.179.49 a kg at Bangkok and Malaysian SMR20 closed at `.147.67 a kg. On National Multi Commodity Exchange the last traded price for February 2017 futures was `.150.43 a kg, March at `.156.58, April at `.163.48 and May at `.168.02 a kg. Tokyo Commodity Exchange January 2017 futures series closed at ¥303.4 a kg, February at ¥302.6, March at ¥297.4, April at ¥288.6, May at ¥288.6 and the contract for delivery in June closed at ¥288.3 a kg. During January 2017, trading range was between ¥261.7 (low on 4th January) and ¥308.5 a kg (high on 16th January).

To read Rubber4U – 1st February 2017 issue: http://rubber4u.com/Public/Abcd.pdf

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

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

Positive trend

Expectations of robust demand from China boosted rubber to a three-year high after buoyant car sales data for November. Natural rubber prices have soared to their highest since December 2013 on anticipation of increased Chinese demand and higher prices for competing synthetic rubber.

The most actively traded contract on the Tokyo Commodity Exchange climbed 3.7 yen to 259.7 yen ($2.25) per kilogram Tuesday, marking a third straight trading day of gains.

An agreement by OPEC, Russia and other oil producers outside the bloc to cut output has powered a sharp rise in crude oil prices and in turn will push synthetic rubber prices higher.

The China Association of Automobile Manufacturers reported vehicle sales of 2.9m in November, up 16.6% y-o-y. Chinese consumers have rushed to purchase vehicles before the tax breaks expire at the end of the year. If demand remains dynamic, more rubber will be needed for manufacturing tyres.

Rubber prices have also been supported by heavy rainfall in Thailand, which led to disrupted harvesting. The Association of Natural Rubber Producing Countries last week said it expected the production of its members to increase only 0.1% in 2016, while demand is forecast to rise 4.1% compared to previous year.

The benchmark RSS4 grade rubber closed at `.131 a kg at Kottayam, while RSS3 grade closed at `.151.66 a kg at Bangkok and Malaysian SMR20 closed at `.129.02 a kg. On National Multi Commodity Exchange the last traded price for December 2016 futures was `.133.32 a kg, January 2017 at `.137.88, February at `.140.51 and March at `.142.93 a kg. Tokyo Commodity Exchange December 2016 futures series closed at ¥254 a kg, January 2017 at ¥255.3, February at ¥253.2, March at ¥255.3, April at ¥256 and the contract for delivery in May 2017 closed at ¥259.7 a kg. On Wednesday, most probably Tocom futures contract for delivery in May 2017 may trade in the range of ¥260 & ¥270 a kg.

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

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

Expectation to boost sentiments

Oil prices on Tuesday ended lower for the first time since OPEC agreed on 30th November, to cut output. Brent futures settled at US$53.93 a barrel, while U.S. West Texas Intermediate (WTI) crude settled at US$50.93 per barrel.

On Wednesday, Reserve Bank of India’s Monetary Policy Committee (MPC) will place Fifth Bi-monthly Monetary Policy Statement for 2016-17 on its website at 2.30 pm. Market will be keen to understand the RBI’s roadmap for currency management. Market expects 0.25% cut in repo rate, while sharp 0.50% cut in repo rate is expected to boost sentiments. Rubber4U estimates there won’t be any cut in repo rate.

The benchmark RSS4 grade rubber closed at `.129 a kg at Kottayam, while RSS3 grade closed at `.142.06 a kg at Bangkok and Malaysian SMR20 closed at `.119.20 a kg. On National Multi Commodity Exchange the last traded price for December 2016 futures was `.131.36 a kg, January 2017 at `.133.61, February at `.136.08 and March at `.139.59 a kg. Tokyo Commodity Exchange December 2016 futures series closed at ¥229.3 a kg, January 2017 at ¥231.2, February at ¥231.4, March at ¥233.7, April at ¥237.5 and the contract for delivery in May 2017 closed at ¥240.4 a kg. On Wednesday, most probably Tocom futures contract for delivery in May 2017 may trade in the range of ¥238 & ¥243 a kg.

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

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

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