Aim to develop rubber industry

Malaysia and Thailand have agreed to co-operate on the Rubber City project located on the Thai-Malaysian border, aimed at developing the rubber industries of both countries. Under the proposed project, a city would be created in the border area linking Dan Prakob in Songkhla's Na Thawee district and Kota Putra in the Malaysian state of Kedah. Malaysia wants Thailand to supply raw materials to support its industries producing items such as rubber gloves and tyres.

According to latest data, there is an improvement in China’s economy; which in turn boosting speculation that rubber demands will grow from the largest consumer. Natural rubber consumption will climb 1.5% this year and 4.1% in 2014 from 11.04 million tonnes in 2012. According to experts rubber demand for tyres are expected to grow 3.5% a year to 2020.

Today, RSS3 grade closed at `.155.35 a kg at Bangkok, while Malaysian SMR20 closed at `.143.53 a kg. On the Tokyo Commodity Exchange, October futures series closed at ¥242.8 a kg, November at ¥244.5, December at ¥247, January 2014 at ¥249.8, February at ¥252 and the contract for delivery in March 2014 closed at ¥254.3 a kg. While on the National Multi Commodity Exchange October futures were trading at `.166.49 a kg, November at `.165.99, December at `.168 and February 2014 at `.172.97 a kg at 12.10 pm IST.

What our readers says: http://rubber4u.com/Public/Views.pdf

Read lot more in Rubber4U – 15th October 2013 issue

More action in waiting

The WTI Crude Oil markets fell during the early session on Thursday and currently trading at US$102.75 a barrel at 20.15 IST and the market continued to test the lows of the consolidation area.

Tokyo Commodity Exchange plans to attract more trading from investors in China and India to boost volume, which has jumped 22% in the first eight months of the year. The decline of rubber prices on TOCOM, which influenced the direction of global rubber prices, was weighed down by negative sentiment resulting from weaker US equities and lower crude oil prices. Uncertainty about when the U.S Federal Reserve will start tapering stimulus has made Japanese investors cautious and this may also slow trading. Market participants stayed on the sidelines, waiting for the final reading of the US second-quarter GDP data to be released.

Reserve Bank of India chief, Raghuram Rajan surprised the markets with India's first policy rate increase in nearly two years in a bid to ward off rising inflation. Expectations of rate hikes have gone up now as monetary policy has given a clear and transparent signal that an upward bias on long-term interest rates will continue and will hike rates again at the central bank's next policy review on 29th October.

Rubber declined again

Today rubber price fell again due to weakening crude oil prices and a stronger yen, which cut the appeal for the commodity. The yen climbed after Federal Reserve Bank of New York president William C Dudley said policy makers must forcefully push against economic headwinds. The contract for February delivery on the Tokyo Commodity Exchange lost as much as 2.64% to ¥276.4 a kg.

Today, at Kottayam, RSS4 grade closed at `.180 a kg. RSS3 grade closed at `.166.24 a kg at Bangkok, while Malaysian SMR20 closed at `.149.17 a kg. On the Tokyo Commodity Exchange, September futures series closed at ¥263.8 a kg, October at ¥261.8, November at ¥264.7, December at ¥269, January 2014 at ¥272.5 and the contract for delivery in February 2014 closed at ¥276.4 a kg. While on the National Multi Commodity Exchange October futures were trading at `.176.50 a kg, November at `.175.50, December at `.177.50 and January 2014 at `.179 a kg at 4.00 pm IST.

Bull market to affect tyre manufacturers

Rubber prices are entering bull market as futures hit a three-month high following indications that China's economy is likely to demand more rubber. Tuesday, the contract for February delivery on the Tokyo Commodity Exchange were trading at ¥282.2 a kg at 13:45 JST.

India is trying to tap certain sectors in the global market where China has been vacating due to rising wages. India has move up in the global value chain to increase its share in the global market. India's exports rose for the second straight month by 12.97% to US$26.14 billion in August, while the trade deficit narrowed as gold imports fell. It is expected that the agreement on trade facilitation would help in reducing transactions cost of exporters at WTO Ministerial Meeting at Bali in December.

On Monday, RSS4 grade closed at `.181 a kg, at Kottayam. Tuesday, RSS3 grade closed at `.166.24 a kg at Bangkok, while Malaysian SMR20 closed at `.149.17 a kg. On the Tokyo Commodity Exchange, September futures series were trading at ¥265 a kg, October at ¥267.6, November at ¥270.3, December at ¥273.4, January 2014 at ¥278.2 and the contract for delivery in February 2014 at ¥282.2 a kg, at 13.45 JST. While on the National Multi Commodity Exchange October futures were trading at `.177.76 a kg, November at `.177.66, December at `.179.39, and January 2014 at `.180.50 a kg.

AIRIA Office Bearers for 3013-14

Market overreacted

Market overreacted today. Credit policy could not continue the euphoria that the market had been riding on Ben Bernanke’s comments. RBI decided to hike repo rate by 25 basis points and banks are unlikely reduce their lending rates anytime soon. High interest rate has been identified as a major barrier to boosting growth. The RBI has admitted that industrial activity continues to remain sluggish and even consumption demand is now starting to weaken in the economy.

Today, at Kottayam, RSS4 grade closed at `.185.50 a kg. RSS3 grade closed at `.166.05 a kg at Bangkok, while Malaysian SMR20 closed at `.150.51 a kg. On the Tokyo Commodity Exchange, September futures series closed at ¥266.5 a kg, October at ¥269.5, November at ¥272.5, December at ¥275.3, January 2014 at ¥279.7 and the contract for delivery in February 2014 closed at ¥283.9 a kg. While on the National Multi Commodity Exchange October futures were trading at `.180.51 a kg, November at `.180.86, December at `.183, and January 2014 at `.189.50 a kg at 4.00 pm IST.

Expecting more action

The rupee slumped to a record low of 68.85 to the dollar on August 28 but has since clawed back some ground and last traded at 63.22 on Wednesday. Rupee is expected to regain further ground at the close of the current financial year at 56-58 per dollar. India's headline inflation rate based on the wholesale price index soared to a six month high of 6.1% in August. The Reserve Bank of India is expected to leave key policy rates unchanged on Friday.

Today, at Kottayam, RSS4 grade closed at `.186.50 a kg. RSS3 grade closed at `.165.24 a kg at Bangkok, while Malaysian SMR20 closed at `.150.96 a kg. On the Tokyo Commodity Exchange, September futures series closed at ¥260.9 a kg, October at ¥265.4, November at ¥267.1, December at ¥270.1, January 2014 at ¥274 and the contract for delivery in February 2014 closed at ¥277.8 a kg. While on the National Multi Commodity Exchange October futures closed at `.183.34 a kg, November at `.182.85 and December at `.185 a kg. Tommorrow one can expect the market in red.

Read lot more in Rubber4U – 1st October 2013 issue