Rubber4U

1st June 2011

Domestic NR price above the international price

According to the experts, the recent fall of rubber prices in the international markets are expected to pick up at least by the end of May. The reason for the dip in prices has been the falling rubber prices in the global market, especially those supplied by Thailand.

Today, price of natural rubber (RSS-4 grade) in the domestic market closed at Rs 232 a kg compared to yesterdays Rs. 230 a kg. As the global market had shown signs of correction, RSS3 grade price at Bangkok closed at 228.75 a kg.

Read lot more in Rubber4U – 15th May 2011 issue

During the week rubber likely to trade between Rs. 232 & Rs. 221 a kg.

Rubber declined after the China's manufacturing index fell more than economists forecasted. Lack of demand especially from China due to its high level of rubber inventory is likely to drag prices down during the week. Rising supply from major rubber producing countries could also put pressure on prices.

The unusual rainfall in Kerala has brought in a slight correction in prices as rubber production has gathered momentum as higher rubber prices forced growers to re-start tapping well in advance of monsoon. It is expected that rubber prices to decline further in the coming days and will be trading between Rs. 232 to Rs. 221 a kg, as tapping will continue till end of May.

Read lot more in Rubber4U – 15th May 2011 issue

NR in the mode of correction

The natural rubber price is now in a correction mode due to increased production. Both, the domestic and international prices of the commodity have fallen during the week due to fresh developments in production and supply of the natural rubber. The unusual rainfall in Kerala has brought in a slight correction in prices as tapping has gathered momentum. Today, price of natural rubber (RSS-4 grade) fell by Rs 3 a kg to Rs. 230 a kg, as compared to yesterdays Rs. 233 a kg.

As the global market had shown signs of correction, it is expected that there will be sharp increase in China’s import.

Read lot more in Rubber4U – 15th May 2011 issue

Trend for those yet to come

Automotive component makers are taking positions in India’s auto industry, which is growing at about 10% a year and would grow by 10 to 12% a year for the next two years. During the month two deals were announced, Germany’s Continental acquired the tyre business of Modi Rubber and US based Dana Corporation said it had agreed to buy the drive-head unit of Axles India, a joint venture between Dana and two Indian companies – Sundaram Finance and Wheels India. The deal is expected to close in the second half of the year.

Overseas interest in India’s auto market could be driven by strong consumer fundamentals as well as its existing low car market penetration of 12 cars per 1,000 people as compared to China at 21 and US at 500. The future buyers could show interest in India’s low-cost manufacturing base from where they could export their products to South East Asian region.

On the other hand the rubber industry has proposed to the government to provide a one time subsidy of Rs 1 lakh per hectare to small farmers for a period of three years for planting rubber trees, in the 12th Five-Year Plan (2012-17) to boost natural rubber output. At present the government is providing a subsidy of Rs 19,500 per hectare on rubber cultivation in the traditional areas and Rs 30,000 per hectare in non-traditional areas. The rubber producers said that hefty subsidy would help increase rubber production in newer areas like the northeastern states.

The rubber industry has also suggested the government to expand the country's rubber output by following the Chinese model of acquiring land in other countries for plantation, to meet its growing natural rubber demand.

Read lot more in Rubber4U – 1st May 2011 issue

SBR price may surge on tighty supply

Styrene Butadiene Rubber (SBR) prices have risen above $4,000/tonne and are likely to remain firm in the second quarter because of tight supply, said an India based tyre producer.

In Japan, a number of SBR plants have shut operations or cut production in the wake of the massive 9.0 magnitude earthquake and tsunami that struck on 11th March 2011. The shortfall in SBR supply in Japan has prompted other Asian producers to step in to provide the material, shaving the volumes available for India and on the other hand to meet the shortfall in the Japanese market, Korean SBR producers have reduced their volume offers to India.

According an India based trader, SBR market is turning more bullish as there is no spot cargo from Europe because of the tight butadiene supply in Europe.

Read lot more in Rubber4U – 1st May 2011 issue

Rubber prices likely to remain low during the week

On 18th April 2011, the domestic NR price (RSS4 grade) closed at Rs. 239 per kg at Kottayam and Rs. 261.94 per kg (RSS3 grade) at Bangkok, on weak sentiment. Natural rubber prices may fall due to fall in rates in global physical and future markets.

According to Rubber Board of India, natural rubber production in the country rose to 8,61,950 tonnes in 2010-11, an increase of 3.67% against 8,31,400 tonnes in 2009-10.

The board has projected NR production at 9,02,000 tonnes and consumption at 9,77,000 tonnes during 2011-12.

Read lot more in Rubber4U – 15th April 2011 issue