MUMBAI, April 26 (Reuters) - Indian rubber prices, which hit record highs last week, are likely to remain steady this week as firmness in overseas market is seen offsetting weak spot demand from tyre makers due to higher prices, analysts said.
"Demand is weak compared to last week. Market is expecting improvement in arrivals in next few weeks due to recent rainfall in Kerala," said Shiji Abraham, analyst with JRG Wealth Management.
India's rubber production is likely to rise by 7.5 percent to 893,000 tonnes in 2010/11 helping reduce costlier imports, a senior Rubber Board official said last week.
The benchmark June contract NMRUM0 on the National Multi-Commodity Exchange (NMCE) provisionally closed down 0.3 percent at 17,168 rupees per 100 kg, after hitting a contract high of 17,600 last week.
Spot price of the most traded RSS-4 rubber (ribbed smoked sheet) rose by 100 rupees to 16,850 rupees in Kottayam, Kerala, on Monday, Rubber Board data showed.
The price had hit a record high of 16,950 rupees last week. Firmness in overseas market due to tight supplies will support prices, analysts said.
High demand for rubber means physical supply will remain tight even when tapping gets into full swing in Thailand in May, and Thai RSS3 may stay above $3.50 per kg until June, a senior industry official said on Monday. See [ID:nSGE63P0HA]
Tokyo rubber futures rose on Monday, supported by tight supply, a weaker yen and rising oil prices. See [ID: nTOE63P040]
In India, sales of vehicles -- including cars, utility vehicles, trucks, buses, motorcycles and scooters -- jumped an annual 26.4 percent in 2009/10 to 12.3 million units, data from Society of Indian Automobile Manufacturers (SIAM) showed.
(in.reuters.com)
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