Lots of expectations, but at risk

Benchmark Tokyo rubber futures jumped to a 2-week high as stronger Shanghai futures and an overnight gain in oil prices boosted risk appetite. Hopes were high for higher oil prices at the beginning of the year with the start of the OPEC cuts. Oil prices rose and hit a one-week high, boosted by a weaker dollar and short covering, although they slipped after an industry report said U.S. inventories increased.

The oil price recovery also faltered at some point as it became evident that the glut was not diminishing as fast as it was expected and that rising U.S. shale output and continued recovery of production from exempt Libya and Nigeria were offsetting a large part of OPEC’s cuts. And if Chinese demand growth is not as strong as OPEC and the market hope for, the glut could take even longer to clear, and oil prices could stay lower for even longer.

According to data from the Rubber Trade Association of Japan showed, crude rubber inventories at Japanese ports stood at 4,999 tonnes as of 20th June, up by 5.8% from the previous inventory date. While crude rubber inventories at Japanese ports stood at 6,723 tonnes as of 10th July, up by 5.9% from the last inventory date. According to exchange, rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.5% from the previous Friday.

Today, benchmark Tokyo rubber futures fell more than 2%. Rubber prices have come under pressure as higher inventories in both Japan and China prompted selling, while weaker oil prices and a stronger yen against the US dollar also weighed on market sentiment. The Tokyo Commodity Exchange (TOCOM) rubber contract for December delivery closed 2.4%, lower at ¥209.3 per kg, after touching a low of ¥206.9 earlier in the session.

The benchmark RSS4 grade rubber closed at `.139 a kg at Kottayam, while RSS3 grade closed at `.116.51 a kg at Bangkok and Malaysian SMR20 closed at `.98.92 a kg. On National Multi Commodity Exchange August 2017, the futures closed at `.136.72 a kg, September at `.135.96 and October 2017 closed at `.133.26 a kg. Tokyo Commodity Exchange July 2017 futures series closed at ¥202.4 a kg, August at ¥201.9, September at ¥205.3, October at ¥206.6, November at ¥208.3 and the contract for delivery in December 2017 closed at ¥209.3 a kg. On Tuesday, most probably Tocom futures contract for delivery in December 2017 may trade in the positive range of ¥209 & ¥215 a kg.

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

For 2017-18 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

Oil & Commodity prices sink

Last month, OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018. The increase in U.S. drilling activity and shale production has offset efforts by OPEC and other producers to cut output in a move to prop up the market. Oil prices sank to the lowest level since November as concerns over a steady increase in U.S. production added to fears over a glut in the market. The U.S. West Texas Intermediate crude August contract closed at $42.53 a barrel, while Brent oil for August delivery closed at $44.82 a barrel.

The benchmark RSS4 grade rubber closed at `.122 a kg at Kottayam, while RSS3 grade closed at `.114.18 a kg at Bangkok and Malaysian SMR20 closed at `.89.51 a kg. On National Multi Commodity Exchange July 2017, the futures closed at `.124.70 a kg, August at `.127.38 and September 2017 closed at `.126.85 a kg. Tokyo Commodity Exchange June 2017 futures series closed at ¥197 a kg, July at ¥190.9, August at ¥192.1, September at ¥191.4, October at ¥186.8 and the contract for delivery in November 2017 closed at ¥186.3 a kg. On Thursday, most probably Tocom futures contract for delivery in November 2017 may trade in the positive range of ¥187 & ¥195 a kg.

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

For 2017-18 Rubber Forecast: http://rubber4u.com/Public/RForecast.pdf

GST

Understand GST

Further fall expected

The Tokyo Commodity Exchange futures, which set the tone for rubber prices, erased early gains in part after the bourse urged investors to settle contracts well before expiry on 24th April. Tokyo rubber futures hit a five-month low, as it came under pressure from heavy selling. Tocom rubber contract for September delivery finished closed at ¥212.9 per kg, its lowest close since 18th November.

The benchmark RSS4 grade rubber closed at `.141 a kg at Kottayam, while RSS3 grade closed at `.143.22 a kg at Bangkok and Malaysian SMR20 closed at `.102.40 a kg. On National Multi Commodity Exchange futures series closed for May 2017 closed at `.137.16 a kg, June at `.140.23 and July at `.142.34 a kg. Tokyo Commodity Exchange April 2017 futures series closed at ¥246.5 a kg, May at ¥239.9, June at ¥226, July at ¥219.7, August at ¥215.6,  and the contract for delivery in September closed at ¥212.9 a kg. On Wednesday, most probably Tocom futures contract for delivery in September 2017 may trade in the range of ¥201 & ¥210 a kg.

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

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

Market may trade in red

The Tokyo Commodity Exchange (Tocom) rubber contract for August delivery closed at ¥250 per kg. It is expected that on Friday it may trading in negative. Benchmark rubber futures dropped after Thailand said it would offload rubber from its stockpiles. Thailand would sell 13,000 tonnes of rubber in a state auction, aiming to offload the remaining 107,000 tonnes in stockpiles by the end of May.

According to customs data, China's imports of natural rubber rose 55.4% in February from a year earlier. Only rubber stockpiles at TOCOM are low but inventories in China stay high, said a Tokyo-based dealer.

Oil prices dropped to near four-month lows because of investor concerns that OPEC-led supply cuts were not yet decreased.

The benchmark RSS4 grade rubber closed at `.149 a kg at Kottayam, while RSS3 grade closed at `.155.27 a kg at Bangkok and Malaysian SMR20 closed at `.126.16 a kg. On National Multi Commodity Exchange futures series closed for April 2017 closed at `.146.80 a kg, May at `.151.70 and June at `.154.99 a kg. Tokyo Commodity Exchange March 2017 futures series closed at ¥277 a kg, April at ¥267.5, May at ¥263.3, June at ¥257.2, July at ¥253 and the contract for delivery in August closed at ¥250 a kg. On Friday, most probably Tocom futures contract for delivery in August 2017 may trade in the range of ¥243 & ¥253 a kg.

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

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

NR output up in January 2017

In January 2017, India’s natural rubber production increased by 26.92% to 66,000 tonnes from 52,000 tonnes output in January 2016, as farmers increased tapping to cash in on the price rally. While the consumption of natural rubber declined marginally by 1.03% to 84,000 tonnes from 84,875 tonnes in January 2016.

Imports fell by 39.02% to 24,093 tonnes from 39,512 tonnes in the same month of 2016, as tyre makers trimmed overseas purchases due to a rally in global prices. Natural rubber prices in the domestic market jumped to their highest levels in three years following a surge in overseas prices due to supply disruptions in Thailand.

The stocks at the end of January 2017 stood at 2.77 lakh tonnes.

The benchmark RSS4 grade rubber closed at `.158.50 a kg at Kottayam, while RSS3 grade closed at `.175.18 a kg at Bangkok and Malaysian SMR20 closed at `.144.24 a kg. On National Multi Commodity Exchange futures series closed for March 2017 closed at `.155.99 a kg, April at `.163.07 and May at `.168.52 a kg. Tokyo Commodity Exchange March 2017 futures series closed at ¥302.6 a kg, April at ¥289.7, May at ¥283.3, June at ¥275.2, July at ¥269.7 and the contract for delivery in August closed at ¥269.4 a kg.

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

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

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