Prices on Tokyo’s rubber exchanges eased overnight, despite reports of floods in Thailand.
On Tokyo's Tocom Exchange, prices for the six-month contract closed unchanged at yen 434 ($5.24) per kg on Thursday 31 March.
In Singapore, Sicom said short-dated RSS3 prices closed slightly higher at around $5.70. Short-dated TSR 20 recovered by $0.10, closing at $5.09
India's NMCE prices increased by about Rs 6, with April deliveries finishing at around Rs 236 ($5.29) per kilo
Shanghai Futures Exchange eased slightly, with the highest price recorded at yuan 36.7 ($5.60) per kilo for short-dated contracts. Longer-dated contracts remained level, finishing at around Yuan 35.
(European Rubber Journal, March 31, 2011)
Thursday, March 31, 2011
NR Prices Unchanged
Floods delay Thai rubber shipments, Tokyo futures bounce
* About 50,000 tonnes delayed, more possible
* Physical prices up 1.8%; Tokyo bounces from low
* Flooding could aggravate already-tight supplies
* Prices to remain high on tight supply (Adds comments, market background)
By Apornrath Phoonphongphiphat
BANGKOK, March 31 (Reuters) - Severe floods in southern Thailand have delayed at least 50,000 tonnes of rubber shipments from the world's top producer and exporter, worsening the physical market tightness and sparking a rebound in Tokyo futures.
Extended flooding, which has forced railways to suspend services, cut off roads and shut three airports, could delay up to half of Thailand's rubber exports and exacerbate the shortage during the typically dry, low-production season and ahead of Thailand's Songkran festival holidays in mid-April.
"At least 50,000 tonnes of rubber had to be delayed and I expect more could be delayed if the floods persist longer than expected," Luckchai Kittipol, president of the Thai Rubber Association, told Reuters on Thursday.
Thailand's southern provinces produce about 90 percent of the country's annual rubber output of 3.2 million tonnes. Late last year, shipments of 50,000 tonnes of Thai RSS3 grade were also delayed by chest-high floods in the growing area.
Farmers normally stop rubber tapping this time of year but erratic weather and unseasonal rains have forced some rubber producers to temporarily shut factories. Farmers usually resume tapping in mid-April and supply could return to normal by May.
"But this time we are not quite sure how long the flood will persist. If it lasts longer, we may need to delay up to 50 percent of our normal monthly exports," Luckchai said, referring to around 200,000 tonnes of Thailand monthly rubber exports.
Physical rubber prices, which have jumped to records this year fueled by demand from Chinese automakers, were firm on Thursday. The free-on-board (FOB) price of the benchmark Thai RSS-3 grade rubber rose to $5.80 per kg, up 1.8 percent from Wednesday.
"We saw the first spike in rubber prices around October to November. I think the similar kind of impact will likely repeat itself this time around, coupled with the fact it's wintering season," said Ker Chung Yang, an analyst at Phillip Futures Pte in Singapore.
"We are likely to see further disruptions in transportation. By then, we are likely to see further run-up in rubber prices."
The benchmark Tokyo rubber futures contract for September delivery, which sets the global trend, bounced from an intraday low around 422.5 yen a kg before settling at 432.2 yen, up 2.1 yen from previous settlement.
"The floods are real, however, I believe the disruption will be temporary," said a physical dealer in Singapore who mainly trades Indonesian grade rubber.
"Let's say two weeks or so. There's a big price differential between SMR20, STR20 and SIR20 already. So I think buyers will switch if they can't get material from Thailand."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For ANRPC world rubber forecast, click [ID:nL3E7ES15T]
For IRSG raises global rubber demand, click [ID:nL3E7EB118]
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
In Indonesia, the world's second-biggest producer, production has also dropped significantly as its main rubber areas have been hit by heavy rain, which disrupts tapping.
The floods and mudslides in southern Thailand have killed 16 people, authorities said on Thursday, as rain began to subside. Local officials warned of more possible mudslides.
Trains to the region remained suspended and an airport in Nakhon Si Thammarat province was still shut. Two airports resumed services, including one on Koh Samui, a resort island popular with Thai and foreign tourists.
A mudslide in Krabi province on Wednesday killed at least three people and injured 39. Six remained missing. Mudslides were reported in three other areas but there was no report of casualties.
PRICES TO STAY HIGH
With seasonal supplies tight and shipments disrupted at a time of strong demand, physical rubber prices were expected to stay at relatively high levels, traders said.
"Global rubber supplies do not exceed demand so I don't think (physical) prices will drop to even TOCOM (futures) prices, which influence cash rubber prices," Luckchai said.
World rubber output was forecast at 10 million tonnes in 2011, while demand was forecast at the same level, he added.
TOCOM prices were forecast to stay at firm levels after passing through a corrective phase following recent rallies, dealers said.
Spot rubber gains a tad on covering buys
KOTTAYAM, MARCH 31:
Physical rubber prices finished marginally higher on Thursday. Covering purchases kept the market firm since the uptrend is expected to regain strength during in the new financial year. Late declines in domestic futures took the steam out and the gains were limited as sheet rubber remained under pressure on late trading hours.
Short-term prospects of natural rubber depend on how early the geopolitical concerns are mitigated and the nuclear crisis in Japan is solved according to Mr. Jom Jacob, Senior Economist, Association of Natural Rubber Producing Countries. Among other reports, at least 50,000 tonnes of rubber shipments from Thailand, the world's biggest rubber producer and exporter, were delayed by severe floods in the country's major rubber producing areas, disrupting transportation. More rain is expected in the next few days.
Sheet rubber improved to Rs 230.50 (230) a kg as quoted by the traders. The grade closed at Rs 231 (229) a kg according to Rubber Board.
The April series weakened to Rs 235.50 (235.96), May to Rs 242.01 (242.75), June to Rs 247.50 (248.69) and July to Rs 248.50 (249.43) a kg for RSS 4 on the National Multi Commodity Exchange.
RSS 3 (spot) inched up to Rs 255.99 (254.09) a kg at Bangkok. The April futures for the grade increased to ¥448 (Rs 241.01) from ¥444.9 during the day session but then slipped to ¥443.1 (Rs 238.40) a kg in the night session on the Tokyo Commodity Exchange.
Spot rates were (Rs/kg): RSS-4: 230.50 (230); RSS-5: 228 (227); ungraded: 224 (222); ISNR 20: 225 (224) and latex 60 per cent: 135 (134).
(Source: http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article1588443.ece)
India rubber futures slumps on weak global cues
KOCHI (Commodity Online): Natural rubber prices gained by Rs.2 to Rs.231/Kg on Thursday in domestic market, as per the Rubber Board data while futures market fell tracking overseas market.
"Natural rubber prices followed the upward trend in the global and domestic future markets," Indian Rubber Dealers Association President George Valy told.
The benchmark April contract at NMCE today closed at Rs.23596, a decline of Rs.46 over the previous close. Volume traded of the contract is 2887 tonnes.
At the Tokyo Commodity Exchange (TOCOM), rubber futures prices for April delivery fell by 443.10 yen per kg (Rs 238.76/kg), down by 3.90 yen (Rs 2.10/
kg) from the last trading price.
The prices of RSS-3 at the Bangkok market today rose to Rs.255.99 per Kg as against Rs 254.09 per Kg yesterday, Rubber Board data said.
According to experts, physical markets have received natural rubber supply from the farmers (producers), which could soften the prices in the coming days.
"Some parts of rubber producing areas in Kerala have witnessed unexpected summer rains, which is a signal that the tapping could continue. So farmers have brought in rubber supplies in the markets that could soften the prices," Valy pointed out.
(Source: http://www.commodityonline.com/news/India-rubber-futures-slumps-on-weak-global-cues-37765-3-1.html)
Tokyo rubber futures up
Bangkok (april 01, 2011) : tokyo rubber futures ended higher on thursday, rebounding from early losses, on supply concerns as floods delayed shipments from thailand, the world's biggest exporter, dealers said. the benchmark rubbercontract on the tokyo commodity exchange for september delivery rose 2.1 yen to settle at 432.2 yen ($5.21) per kg.
the benchmark contract recovered from the session's low of 432.5 yen as supply concerns triggered speculative buying. the most-active shanghai rubber contract for september delivery was down 205 yuan to finish at 34,895 yuan ($5,322) per tonne on thursday.
severe flooding in southern thailand has delayed at least 50,000 tonnes of rubber shipments from the world's biggest producer and exporter, a senior official said on thursday, predicting further possible delays. tocom rubber was expected to rise further on friday, with the 430 yen level was seen as a strong support level, dealers said.
Tokyo Futures Down Slightly, Seen In Rang Trade
Tokyo rubber futures dropped slightly on Thursday (Mar 31) on profit taking after recent rises supported by limited supply as caution prevailed on whether prices could break above a key psychological level of 430 yen, dealers said.
FUNDAMENTAL
The benchmark rubber contract on the Tokyo Commodity Exchange for September delivery slipped 1.5 yen to 428.6 yen ($5.17) per kg by 0106 GMT.
The most-active Shanghai rubber contract for September delivery dropped 295 yuan to 34,805 yuan per tonne.
The yen slipped across the board on Thursday (Mar 31), hitting fresh 10-month lows versus the euro and holding near a three-week trough against the dollar as expectations grew that Japan will lag euro zone and U.S. Central banks in raising interest rates.
(Reuters, March 31, 2011)
Physical Prices on March 31
Physical rubber prices were higher on Thursday (March 31), supported by tight supply and firm futures prices on the Tokyo Commodity Exchange, dealers said. Severe flooding hit Thailand, the world's biggest rubber producers, killed 21 people, stranded thousands of tourists and may delay some rubber shipments.
Physical Prices of rubber Compared to March 30 
NOTE - The prices quoted above are offer prices collected from traders in Thailand, Indonesia and Malaysia. They are not official prices quoted by state-run rubber agencies in those countries.
(Reuters, Bangkok, March 31, 2011)
At Least 50,000T Thai Rubber Shipments Delayed By Floods
At least 50,000 tonnes of rubber shipments from Thailand, the world's bigges rubber producer and exporter, were delayed by severe floods in the country's major rubber producing areas, disrupting transportation, senior industry officials said on Thursday (Mar 31).
"At least 50,000 tonnes of rubber had to be delayed and I expect more could be delayed if the flood persists longer than expected," Luckchai Kittipol, president of the Thai Rubber Association, told Reuters.
(Reuters, March 31, 2011)
Wednesday, March 30, 2011
Malaysian Rubber Goods Exports Jump As Recovery Takes Hold
The Malaysian rubber product industry recovered in 2010 after a difficult year in 2009, with a 21.5 percent growth in exports, year-on-year, according to new data released by the Malaysian Rubber Export Promotion Council (MREPC).
In 2010, exports of rubber products registered RM12.86 billion (euro 3020 million), surpassing by 14.5 percent the pre- crisis exports recorded in 2008 of RM11.2 billion.
Exports to all regions recorded positive growth in 2010 when compared to 2009. Major increases in exports in 2010 were recorded to Central Asia (78 percent), Eastern Europe (47 percent), South Asia (30 percent), South America (30 percent) and North America (26 percent). The North America region was Malaysia’s largest export destination, taking 30 percent or RM3.9 billion worth of Malaysian exports of rubber products, followed by EU27 with 26 percent or RM3.3 billion, East Asia (14 percent or RM1.7 billion) and ASEAN (9 percent or RM1.1 billion).
All the top ten exported product categories showed growth in 2010 when compared to 2009. Significant increases in exports were registered for rubber gloves (24.8 percent), latex threads (11.8 percent), tyres (29 percent), rubber hoses (44 percent), catheters (45 percent) and condoms (21 percent).
The contribution of the latex sector to total Malaysian exports of rubber products increased significantly to reach a high of 80.3 percent in 2010 or RM10.3 billion from 78.8 percent or RM8.3 billion in 2009.
In 2010, rubber gloves continued to contribute significantly to the total exports of rubber products, registering RM8.9 billion in export value or 69 percent of the total value of all rubber products exported. Significant increases were registered for exports to China (20 percent), USA (27 percent), EU27 (26 percent), Japan (31 percent), Russia (54 percent) and South Korea (63 percent). The markets for rubber gloves continued to be dominated by the USA and EU27, which combined accounted for 67 percent of the total exports of rubber gloves from Malaysia in 2010. The average price of rubber gloves exported increased 5 percent in 2010, year-on-year.
(European Rubber Journal, March 30, 2011)
Off-season woes hit rubber production
Thiruvananthapuram: India may be a leader in natural rubber production, but the two-month long off-season has resulted in immense shrinkage in rubber production, if latest estimates put together by ANRPC (Association of Natural Rubber Producing Countries) is anything to go by. The decline has been attributed to climatic factors.
Even when the Kuala Lampur-based global rubber organisation says that the world rubber supply growth would fall from 9.6% in January to 5.4% in March, it adds that this estimate has 'a downward risk'. One reason for this is the 'abnormally high day temperatures in Kerala,” says Djoko S Damardjati, secretary general at ANRPC, in the latest bulletin of the association.
At present, Kerala accounts for about 89% of the total natural rubber produced in India.
All the top-four rubber producers (Thailand, Indonesia, Malaysia) are impacted by the 'wintering season' in rubber plantations in March and April. World over, while the months of October and November see about 10-11% of total produce, in the March-April period, this is as low as 4.8-5.8%.
A close look at the off-season natural rubber production shrinkage in the top-four rubber-producing countries shows that the this fall in output is worst in India.
Natural rubber production in India in March and April is 5.6% and 6.4% of total annual production.
In 2010, the country's average yield (kg per hectare of tapped area) scored as high as 1,784, compared to just 1,211 in Thailand, the world's largest producer. In total, as far as rubber cultivation area is concerned, India ranks sixth. The present tightness in global rubber supply is likely to continue till April-end, according to the latest estimates.
Total production among ANRPC members is expected to reach 10.06 million tonne t in 2011. This is up 6.2% from 9.4 million tonne last year. The growth in supply in 2011 comes from the expansion in yielding area by an expected 2,03,000 hectare and increase in average yield by 43 kg per hectare.
(Source: http://www.financialexpress.com/news/offseason-woes-hit-rubber-production/769493/0)
Rubber output seen up 4% despite low productivity
KOCHI, MARCH 30:
Despite having large acreage under low-yielding aged trees and resultant stagnant levels of productivity, India's natural rubber output is slated to grow 3.9 per cent to 8.84 lakh tonnes this year. “It is noteworthy that despite high prices and commercial introduction of improved clones, average yield expected this year is considerably below the level achieved even five years before,” the Association of Natural Rubber Producing Countries (ANRPC) has observed.
While the country had notched up productivity of 1,903 kg a hectare in 2008, the current year's productivity is expected to be 1,800 kg – a growth of 16 kg for a hectare over last year. The unprecedented growth in rubber prices in the last couple of years has been the primary cause for the low productivity. With ailing high prices prevailing in the market, farmers have been averse to re-planting aged trees with new and high yielding clones, sources in the Rubber Board said. Moreover, it will take seven years for newly-planted saplings to be start yielding.
It was in 1979 that the country first introduced a subsidy scheme for promoting rubber new-planting, was followed by a popular integrated scheme launched in 1980. Consequently, there was a planting boom in the country during the 1980's and an estimated 46 per cent of the yielding trees are now in the 20-28 year category and another 13 per cent in the 29-31 year age group.
Farmers' postponement of replanting during the last couple of years, in response to high prices, has aggravated the unfavourable age profile further, the ANRPC said. The increasing focus on non-traditional regions has also contributed to the relatively low yields.
Consumption of natural rubber in India has also been slow this year. Consumption has grown by only 0.6 per cent in January and by 3.4 per cent in February. It is expected to grow 1.9 per cent during the first quarter of the current year. The slow growth in consumption is reflected in the slow growth in the truck and bus tyre segment.
While the auto tyre production in the country grew by 15 per cent in January, it fell 0.4 per cent in the truck and bus tyre segment, according to data provided by the Automotive Tyre Manufacturers Association. It is the bus and truck tyre segment that accounts for the bulk of the natural rubber consumption in the country. Production of passenger cars rose by 25 per cent in January which was coupled with a fall in the production of truck and bus tyres. This is likely to bring down the consumption of natural rubber in the country and trigger a marked tilt in favour of consumption of synthetic rubber, ANRPC said.
Following the production trends of the last couple of years, global rubber production is slated to grow by 6.2 per cent to 10.06 million tonnes in 2011 as against 9.47 million tonnes in 2010. The growth last year was 6.4 per cent. The supply growth was mainly on account of expansion of yielding area by 2,03,000 hectares and productivity growth of 43 kg a hectare.
(Source: http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article1585251.ece?homepage=true)
Natural Rubber rise to Rs 229/kg on firm global cues
New Delhi, Mar 30 (PTI) Natural rubber prices today rose by Rs 2 to Rs 229 per kg in spot markets on the back of a rise in rates in international and domestic future markets.
Prices of natural rubber were ruling at Rs 227 per kg yesterday, the Rubber Board data showed.
"Natural rubber prices followed the upward trend in the global and domestic future markets," Indian Rubber Dealers Association President George Valy told PTI.
The Bangkok spot rubber prices also increased marginally, which strengthened the prices back home in the physical markets, Valy added.
The prices of natural rubber at the Bangkok market today rose marginally by Rs 0.86 to Rs 254.09 per kg as against Rs 253.23 per kg yesterday, Rubber Board data said.
Similarly, at the Tokyo Commodity Exchange (TOCOM),rubber futures prices for April delivery were ruling at 455 yen per kg (Rs 245.05/kg), a rise of 10.1 yen (Rs 5.43/kg) from the last trading price.
According to experts, physical markets have received natural rubber supply from the farmers (producers), which could soften the prices in the coming days.
"Some parts of rubber producing areas in Kerala have witnessed unexpected summer rains, which is a signal that the tapping could continue. So farmers have brought in rubber supplies in the markets that could soften the prices," Valy pointed out.
(Source: http://news.in.msn.com/business/article.aspx?cp-documentid=5092049)
Flooding in Thailand kills 21, strands thousands
Trains to the region have been cancelled and three airports have been shut, including one on the popular island of Koh Samui. As well as Koh Samui, foreign tourists have also been stuck at resorts in Krabi and Koh Phangan.
The Thai navy evacuated about 1,200 people from Koh Samui and Koh Tao, a remote island popular with backpackers.
Thailand's navy sent four vessels including an amphibious landing craft with on-board helicopters to deliver supplies and rescue tourists and villagers in areas severely hit.
"More rain is expected in the next few days," Satit Wongnongtoey, a minister in the prime minister's office, told Reuters.
British ambassador Asif Ahmad said Britain was in close contact with the Thai navy on the evacuation of tourists from the region.
The flooding could delay shipments of between 1,000 and 1,500 tonnes of smoked rubber sheet, industry officials said. The region supplies 90 percent of the 3.2 million tonnes produced annually in Thailand, the world's biggest producer and exporter.
"Small producers along the upper south, who need to carry rubber by road to be shipped from Bangkok's port are facing disruption as roads are cut off," Prapas Uernontat, secretary general of the Thai Rubber Association, told Reuters.
Nearly a million people have been affected by unseasonably heavy downpours across the region.
Mudslides were reported in three areas in Krabi province. At least 10 people were killed in one village, with at least 10 others missing.
Wiboon Sangruanpong, director-general of the Department of Disaster Prevention and Mitigation, said it was too soon to assess full damage and said more mudslides were possible.
Along with the airport on Koh Samui, the Nakhon Si Thammarat and Surat Thani airports have also been shut.
(Source: http://nz.news.yahoo.com/a/-/world/9104451/flooding-in-thailand-kills-21-strands-thousands/)
Tokyo Futures Higher On Stocks, Fund Buying
Tokyo rubber futures rose further on Wednesday (Mar 30) as funds resumed buying after the market was oversold while rising stock markets and a weaker yen lent additional support, dealers said.
FUNDAMENTAL
The benchmark rubber contract on the Tokyo Commodity Exchange for September delivery rose 11.4 yen from Tuesday's (Mar 29) close to the session's high of 428.6 yen ($5.20) per kg.
The most-active Shanghai rubber contract for September delivery rose 235 yuan to 34,550 yuan ($5,266) per tonne by 0106 GMT.
The yen wallowed at 10-month lows versus the euro and near a three-week trough on the dollar early in Asia on Wednesday (Mar 30), having suffered broad losses after several major chart support levels were breached.
(Reuters, March 30, 2011)
ANRPC Ups 2011 World Rubber Output Forecast To 10.06 Million Tonnes
* 2011 output seen up 6.2 pct from 2010 on higher yield
* Top producer Thailand's output forecast to rise 5.5 pct
Global natural rubber production is forecast to reach 10.06 million tonnes in 2011, up from a previous estimate of 9.7 million tonnes, driven by expansion of planting areas and higher yield, the Association of Natural Rubber Producing Countries said on Monday (Mar 28).
"ANRPC's total production of natural rubber is now expected to reach 10.06 million tonnes during this year, up 6.2 percent from 9.47 million tonnes in the year before," the association said in a report.
"The anticipated growth for the current year closely matches with the 6.4 percent growth attained in 2010. The supply growth this year comes from expansion in yielding area by an expected 203,000 hectares and improvement in yield by 43 kg/hectare."
The ANRPC, whose members account for 92 percent of global natural rubber production, had estimated 2011 output at 9.7 million tonnes in February.
Output of top producer Thailand, which accounts for about 34 percent of global supply, is forecast to rise 5.5 percent to 3.43 million tonnes this year with planting area estimated to increase by 110,000 hectares, said the ANRPC.
"About 114,500 hectares of trees planted in 2004 and a portion of 173,000 hectares planted in 2005 are expected to have opened for tapping by now," it said.
"At the same time, a portion of existing aged trees would be uprooted this year for replanting."
ANRPC members include Thailand, Indonesia, Malaysia as well as Cambodia, China, India, Papua New Guinea, the Philippines Singapore, Sri Lanka and Vietnam. The group also accounts for 92 percent of global exports and 48 percent of global consumption of natural rubber.
Prices of tyre grade rubber have dropped more than 12 percent since striking a record above $6 per kg in February, as economic concerns triggered by the unrest in the Middle East and worries about the impact of a deadly earthquake and tsunami in Japan on demand spurred selling on the Tokyo Commodity Exchange.
(Reuters, March 28, 2011)
IRSG Predicts Decade Of Strong Tyre Demand
The secretary general of the influential International Rubber Study Group (IRSG) has predicted strong global demand for tyres through to the end of the decade. Speaking at the opening of Tyrexpo Asia 2011 in Singapore on 29 March 2011 Dr Stephen Evans said: “Our forecasts point to a sustained growth and strong demand for new vehicles and tyres through to the end of the decade. Much of the extra demand will originate from China and to a lesser extend India, but from an overall perspective the years through to 2020 will be a period of opportunity for tyre makers and the replacement and service sectors.”
Dr Evans pointed to strong growth in OE and replacement tyre sales as a result of increased vehicle production: OE passenger car tyre sales growing from 290 million units in 2010 to 400 million units by 2020. Replacement car tyre sales moving from 760 million units in 2010 to 1.2 billion units by 2020.
“We believe there are currently around one billion vehicles in use around the world and predict that figure will rise to as many as 1.45 billion towards the end of the decade. China alone is set to reach a target of an extra 200 million vehicles over the same time frame,” said Dr Evans.
With around 70 per cent of natural rubber and 50 per cent of synthetic rubber going into tyre production, global rubber consumption is set to follow increased tyre manufacturing activity accordingly.
2010 consumption of 10.7 million tonnes of natural rubber for all markets (tyre and non-tyre) is forecast to grow to 15.4 million tonnes by 2020. The comparable figures for all synthetic rubber markets are 13.6 million tonnes in 2010, rising to 18.5 million tonnes by 2020.
(Tyrepress.com, March 29, 2011)
Tight Supply Balances Soft Demand In NR Market
Natural rubber (NR) inventories remain tight around the world, but political unrest in the Middle East and continuing nuclear worries in Japan are balancing tight supplies with soft demand, according to the March 2011 figures from the Association of Natural Rubber Producing Countires (ANRPC).
NR prices fell drastically after the March 11 earthquake and tsunami in Japan, but recovered in two market days because of low production during the “wintering” months, according to the latest edition of the ANRPC statistical newsletter, Natural Rubber Trends & Statistics.
“However, the momentum of recovery has eased towards the end of March caused by a bearish demand outlook,” the publication said. Indeed, world markets have shown a yo-yo price pattern in the past month.
Prices on the Singapore Commodity Exchange (SICOM) for Technically Specified Rubber 20 stood at $4.92 per kilogram for June delivery on March 28. This compares with a per-kilo SICOM price for TSR 20 of $5.18 on March 2, $4 on March 16 and $5.23 on March 22.
Similarly, per-kilo SICOM prices for Rubber Smoked Sheets 3 were $6 on March 2, $4.39 on March 16, $5.58 on March 22, and $5.50 on March 28.
The ANRPC still expects 2011 NR production from member countries to increase by more than 6 percent over 2010, to 10.06 million metric tons from 9.47 million. However, it projects NR stocks to shrink in ANRPC countries early in the year, to 681,000 metric tons at the end of May 2011 from 1.128 million metric tons at the end of January 2011, because of consumption and exports outstripping production and imports.
NR exports from ANRPC countries should increase 5 percent during 2011, to 7.842 million metric tons from 7.471 million, the organization said.
ANRPC member countries—Thailand, Indonesia, Malaysia, India, Vietnam, China, Sri Lanka, the Philippines and Cambodia—account for approximately 92 percent of world NR production, according to the organization.
(Tire Business, March 29, 2011)
NR Prices Show Uptick
Prices on Tokyo’s rubber exchanges moved upward overnight.
On Tokyo's Tocom Exchange, prices for the six-month contract closed up about yen 13 at yen 418 ($5.12) per kg on Tuesday 29 March. April contracts finished up by 6 yen at yen 429 ($5.25) per kilo.
In Singapore, Sicom said short-dated RSS3 prices closed down slightly at around $5.60. Short-dated TSR 20 plunged by $0.25, closing at $4.88
India's NMCE prices increased marginally, with April deliveries finishing at around Rs 227 ($5.07) per kilo
Shanghai Futures Exchange also moved up slightly, with the highest price recorded at yuan 36.9 ($5.62) per kilo for short-dated contracts. Longer-dated contracts remained level, finishing at around Yuan 35.
(European Rubber Journal, March 29, 2011)
Rubber Sector Puts Future In Focus
Upgrading processing facilities and offering training to farmers will help the rubber industry develop in a sustainable manner, said experts at a sustainable rubber development forum in Binh Phuoc Province of Vietnam last week.
The area of rubber tree plantations increased rapidly from 1980-2010, with an annual average rise of 7.7 per cent in area and 10.7 per cent in output, said Pham Van Tinh, deputy director of the National Agricultural Extension Centre. During the period, rubber yields also rose strongly from 703 kilos per ha in 1980 to 1,720 kilos per ha last year.
Rubber tree development has improved the incomes of more than 130,000 farm labourers and more than 143,000 farmer households, Tinh said. Although the sector has flourished in recent years, the sector faces problems compared other countries in the region, he said.
The current rush to plant the tree, without suitable land for cultivation, coupled with excessive exploitation, may cause a lower yield and quality in the future, threatening sustainable development for the sector, he said. "This requires localities to quickly create a zoning plan for rubber plantations and urge farmers to strictly follow a plan and not cultivate the tree on any land when there is a rubber-price surge," said Dr Nguyen Anh Nghia, head of the Rubber Research Institute of Viet Nam's Crop Protection Division.
He also urged localities to improve agricultural-extension activities and give instruction in proper plantation techniques for seed selection, plantation, and harvesting.
Demand for natural rubber in the world market is expected to continue to increase until 2012, however, the planting should not be done indiscriminately, said Tran Thi Thuy Hoa, VRA's general secretary. Currently, the export price of Vietnamese natural rubber is lower than that of Malaysia, Thailand and Indonesia because importers blamed the inconsistent quality of Vietnamese products, Hoa said. "The country, therefore, should improve the quality management system for preliminary processing of natural rubber and support farmers to improve the quality of their rubber raw materials in line with national and international norms to enhance the sector's competitiveness," she said.
The world's natural rubber output this year is expected to increase by 6.2 per cent from last year but is still low compared to the demand for latex, Hoa said. Supply shortage has pushed up rubber prices in recent years, she said. Though the price slightly fell this month due to a political crisis in Libya and the earthquake in Japan, it still stands at more than US$5,000 per tonne.
Currently Viet Nam is the world's fourth largest exporter of natural rubber, exporting 782,200 tonnes last year, earning $2.28 billion. China is the largest buyer of Vietnamese rubber, accounting for 59 per cent of the country's total rubber exports.
Besides latex, last year the country also earned more than $300 million from exports of rubber wood-based products, accounting for about 10 per cent of total wooden products' export revenue, she said. The country last year had 740,000 ha of rubber plantations, an increase of 62,300ha over 2009, mainly located in south-eastern provinces.
The Government has created a master plan to develop the industry until 2015 with a vision to 2020. Accordingly, the country targets having 800,000ha under rubber cultivation by 2015, producing more than 1.2 million tonnes of natural rubber per year by 2020. (Vietnam Net, March 30, 2011)
Tuesday, March 29, 2011
World rubber production likely to rise 6.2%
The Association of Natural Rubber Producing Countries (ANRPC), a 11-member international organisation, projects 6.2 per cent growth in the production of the commodity this year. The expected growth matches the 6.4 per cent increase registered in 2010.
The latest estimates of ANRPC project global output to be at 10.06 million tonnes in 2011 as against 9.47 million tonnes last year.
The increase in output is expected due to a rise in the area under natural rubber. An additional 203,000 hectares has been brought under natural rubber this year.
The total sown area is expected to be 7.19 million hectares compared with 6.99 million hectares in 2010. The average per hectare yield is likely to increase to 1,398 kg per hectare from 1,355 kg per hectare last year.
Supply from Thailand, the world’s largest producer, accounting for 34 per cent of the global supply, is likely to rise 5.5 per cent or 3.43 million tonnes this year due to area expansion.
About 114,550 hectares of trees planted in 2004 and a portion of 173,000 hectares planted in 2005 are expected to be tapped now.
ANRPC projects an increase of eight per cent in the supply from Indonesia and the estimated supply for this year is 2.95 million tonnes. As the world’s second-largest producer, Indonesia accounts for 29 per cent of the total global supply.
In Malaysia, supply would be around 975,000 tonnes as against 1.05 million tonnes targeted by the government.
India’s supply may touch 884,000 tonnes this year, up 3.9 per cent from last year due to an estimated 14,000 hectares increase in the area and better yield. Incidentally, India at present has the highest natural rubber productivity across the globe.
Production in other leading producing countries like Vietnam and China is also estimated to increase this year, according to ANRPC data. Vietnam will have a production of 755,000 tonnes, China (647,000 tonnes), Sri Lanka (153,000 tonnes), Philippines (99,000 tonnes) and Cambodia will supply 42,000 tonnes in the current year.
(Source: http://www.business-standard.com/india/news/world-rubber-production-likely-to-rise-62/430228/)
Industry to face rubber shortage as demand increases
SINGAPORE: Industry experts said the shortage in the supply of rubber is likely to continue this year due to high global demand. Observers attribute this to the strong growth of manufacturing industries in Asia, coupled with a drop in supply because of bad weather conditions.
The cost of the raw materials has gone up. Industry-watchers said the price of tyres has been increasing 10 per cent every three months, for the past year.
According to local importers and manufacturers, the earthquake in Japan has not affected supply and demand. But for the next few months, importing tyres from Japan may take a longer time.
Still, local traders are confident that they have enough stock to see them through in the near future.
Tay Tiang Guan, Executive Director of YHI International, said: "Tyre distributors in this part of the world, we carry stock. For example in our company, we carry about 90 days (worth of) stock. Unless Japan is going to collapse for the next, even more than 90 days then we probably will be affected."
Some tyre distributors expect prices for tyres to come down only from next year.
(Source: http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1119524/1/.html)
Raw material costs force tire prices upward
High oil and gas prices have been in the news for months now.
The trickle down is affecting everything from the food you buy, to the planes you fly and the tires you ride on.
It's not just what is going into your vehicle that's more expensive, it's also what's going on it.
If you haven't bought tires in the past few years, your wallet or purse will not be spared.
"Last year, year 2010, we had price increases anywhere from 25 to 90 percent. This year, they've gone up 8 percent in the first two months, and they've already announced another 6-8 percent increase in April," said Jerome Feldman from Belle Tire.
"Over the past 12 months, I'd estimate it at about 30 percent," Delta Tire's Mike Crittenden said. "Recently on the 15th, there was a 9-10 percent increase on the Cooper-made product that we also sell. which also went up 4 percent in March."
Aside from the increase in petroleum products used to manufacture tires, steel prices have risen 50 percent since early December. From February last year to this year, rubber has doubled in price.
Customers like Todd VanHentenryck of Grand Blanc feel like they're getting nailed by the higher costs. "Two years ago, I bought tires for my Grand Prix. It cost #300. I got them priced today, and it's $508. So that's $200. I haven't had a raise in two years."
Some others are not that concerned with the increased pressure on pricing. "Not too much. I get the max out of my tires. I rotate them the way I'm supposed to. I take care of my car," said Dwight Bocksnick from Flint. "If I get 50-60,000 miles out of them, that's a lot of miles on a set of tires."
Another issue is there are fewer tires being manufactured to limit older tires sitting on store shelves.
"I've never seen in this last year, so hard to get tires. It's just crazy," Feldman said.
It's not just passenger car tires affected by the price spikes. Truck, agricultural, construction and other commercial tires haven't been spared, either. With increases of 8-15 percent already this year, more price hikes are on the way.
Getting the right set of tires at the right price can be a challenge.
The best person to ask is a tire expert.
Although price is certainly an important consideration, so is getting the right tire for the right vehicle.
"Manufacturers will make three different levels of the tire. Some people used to call it a, good, better, best," Crittenden said. "It's like a 40,000, 60,000, 80,000-mile rating on the tires. The 40,000, of course, are going to be cheaper. But your initial investment to step up to the 80,000 is usually not significant. Just $60 to $80, as an example, on a set of four tires."
So is the type of tire.
"A Mercedes Benz will take a different tire than a Chevy Cobalt. The Benz will take what is called a performance tire that has a higher speed rating, does better in higher cornering, braking. The Cobalt will just take a regular tire," Crittenden explained.
Mid-Michigan's four seasons demand a tire that can handle all types of weather.
One thing to look for is the tire siping in the tread area, Crittenden said. "Some tires, your starter, your 40,000-mile entry-level tire will only have one sipe in the tread block."
(Source: http://abclocal.go.com/wjrt/story?section=news/consumer&id=8040824)
Goodyear announces prices of new stock offering: $50 per share
The preferred shares will cost $50 each, more than three times higher than the company's $14.57 open on Tuesday. After three years, in April of 2014, the preferred shares will convert into as many as 3.4 shares of regular stock.
The new shares will pay $2.94 per year in dividends. Goodyear's existing stock hasn't paid dividends since 2003. In addition to paying dividends, the preferred shareholders will be ahead of regular shareholders for payouts of Goodyear fails and liquidates within the next three years.
Based on those numbers, if Goodyear's shares fall over the next three years, the value of preferred shareholder's stock will fall at about the same rate as regular shares. So the value in the preferred shares will come from the dividends and priority ranking in case of liquidation.
If Goodyear's shares rise considerably, the preferred shares will have less value than the regular shares. For example, if an investor were to pay $1,000 for 69 shares of Goodyear's regular stock today, those shares would be worth $2,070 if Goodyear's regular shares were to climb to $30 per share by 2014.
But $1,000 would only buy 20 shares of preferred stock. If Goodyear's regular shares hit $30 by 2014, those preferred shares would convert into 55 regular shares worth about $1,650. Even after the dividends, that's a smaller appreciation than the regular shares would have.
Holders of the preferred shares can convert that stock into regular Goodyear shares at any time before the mandatory 2014 conversion, getting 2.75 shares of regular stock for each preferred share.
Goodyear spokesman Keith Price said investors will have to look over the company's prospectus and decided what value they see in having priority rights and regular dividend payments.
Proceeds from the offering will go to pay off $350 million in Goodyear corporate bonds. Those bonds carry a 10.5 percent interest rate.
(Source: http://www.cleveland.com/business/index.ssf/2011/03/goodyear_announces_prices_of_n.html)
Sri Lanka Hayleys rubber unit gets new chief
Mar 29, 2011 (LBO) - Sri Lanka's Hayleys group has appointed Mahesha Ranasoma to its board of directors and as managing director of its Dipped Products rubber gloves subsidiary from April 01, a stock exchange filing said.
Ranasoma, a former executive at the local unit of the Shell multinational, takes over from J A G Anandarajah at Dipped Products whose board he had joined in August 2010.
Prior to this appointment, he served as the Country Chairman and Managing Director of Shell Gas Lanka Limited and Shell Terminal Lanka Limited.
Ranasoma counts over 11 years of senior management experience in Shell and has over six years of research and development and teaching experience as a senior university lecturer in civil engineering, the statement said.
He has also provided environmental management expertise as a consultant for major private sector and donor funded projects in Sri Lanka.
Ranasoma holds a First Class Honours Degree in Engineering from the University of Peradeniya, a Doctorate from Cambridge University, UK and an MBA with Distinction from the Wales University, UK.
(Source: http://www.lankabusinessonline.com/fullstory.php?nid=655908987)
Tokyo Futures Fall 4 Percent On Falling Stocks, Oil
FUNDAMENTAL
The benchmark rubber contract on the Tokyo Commodity Exchange for September delivery fell as low as 16.6 yen, or 4 percent, to the session's low of 392.7 yen ($4.81) per kg.
The most-active Shanghai rubber contract for May delivery fell 355 yuan to 35,010 yuan ($5,333) per tonne by 0101 GMT.
The euro held its ground early in Asia on Tuesday after comments from the head of the European Central Bank bolstered views for an interest rate hike, while a widening interest rate differential helped the dollar higher on the yen.
(Reuters, March 29, 2011)
NMCE: Rubber surges on short covering
NMCE rubber futures traded positive on active short covering after witnessing a huge fall on Saturday. Futures started the day on positive note on short covering. Positive trend in domestic spot market also supported the prices to recover. However, TOCOM futures market remained down and ended in red on Friday. Thus, negative cues from international market limited the gain at NMCE.
The rubbers futures are projected to continue the positive trend on active short covering on Monday. However, TOCOM August futures are trading down at ¥416.0 per Kg. on strong selling interest. Domestic spot market has also reported a significant upsurge in prices which might support the Indian futures to trade higher. However, negative cues from TOCOM might weigh on prices later in the day.
Factors to Watch For
As per deputy head of the China Rubber Industry Association, Natural-rubber demand in China, the biggest consumer, will rise 8% this year. Consumption will be 3.24 million metric tons, while tire output will climb 7.9 percent to an all-time high of 453 million units
As per the Committee on rubber policy of Thailand Government, Thai government will negotiate with commercial banks to extend loans to exporters to buy rubber from farmers at a minimum price of 120 baht per Kg
According to rubber board of India, Indian February Natural Rubber Output is 54,500 Tons Vs 51,500 Tons, consumption is 79,000 Tons Vs 76,350 Tons and imports are 6,831 Tons Vs 12,278 Tons
As per data released by rubber board, the year end deficit in natural rubber in India is estimated around 1.2 lakh tons and it is expected to be increase to 2 lakh tons during 2011-12
According to Rubber Research Institute of Thailand, ribbed smoked sheet prices gained for a fourth day, up by 6.4% to 170 baht a kilogram on Tuesday
According to the Association of Natural Rubber Producing Countries, Consumption in China, India and Malaysia, representing 48% of global usage, will increase this year
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE April contract, prices are rising while volumes and open interest are falling. Market is running out of traders willing to open or hold an OPEN LONG/BUY. Traders are liquidating both loosing short positions & closing winning long positions. A higher probability the market is set to retrace in price lower at some point.
Japan Futures (TOCOM)
The TOCOM active August contract, prices and volumes are falling while open interest is rising. It is a good indication that a sharp rally against downtrend will develop creating a sell point for downtrend.
Shanghai Futures (SHFE)
The SHFE active July contract, prices and open interest are falling while volumes are rising. Market is running out of traders willing to open or hold an open short/ sell. Traders are liquidating both loosing long positions & closing winning short positions. A higher probability the market is set to retrace in price lower at some point forward.
Malaysia: Rubber product exports up 21.5pc in 2010
Malaysia's exports of rubber products rose 21.5 per cent last year to RM12.86 billion, compared with RM10.58 billion in 2009.
In 2008, the exports amounted to RM11.2 billion.
The chief executive officer of the Malaysian Rubber Export Promotion Council(MREPC) Datuk Teo Suat Cheng said the strong growth in rubber product exports, was due mainly to the economic recovery in most major markets.
He added that promotional activities undertaken by the MREPC last year, also contributed to the recovery.
He said to mitigate the effects of the economic crisis of 2009 and regenerate interest in Malaysian rubber products, the MREPC had last year intensified promotional activities in major markets.
"The close collaboration between the industry and MREPC also helped propel the export performance recovery in 2010," he said in a statement released by the MREPC today.
Exports to all regions recorded positive growth in 2010 when compared to 2009.
Major increases in exports in 2010 were recorded to Central Asia (78 per cent), Eastern Europe (47 per cent), South Asia (30 per cent), South America (30 per cent) and North America (26 per cent).
The North America region was Malaysia's largest export destination, taking up 30 per cent or RM3.9 billion worth of Malaysian exports of rubber products, followed by the European Union (EU) at 26 per cent or RM3.3 billion, East Asia (14 per cent or RM1.7 billion) and Asean (nine per cent or RM1.1 billion).
All the top-ten export destinations in 2010 showed strong growth in the import of Malaysian rubber products, year-on-year.
The United States (US) was Malaysia's leading export destination for rubber products, taking up 28 per cent.
Of the top ten export destinations, exports to South Korea increased the most at 53.3 per cent followed by Thailand (51.7 per cent) and China (30.7 per cent).
In 2010, rubber gloves continued to contribute significantly to the total exports of rubber products, registering RM8.9 billion in export value or 69 per cent of the total value of all rubber products exported.
The market for rubber gloves continued to be dominated by the US and EU, which together accounted for 67 per cent of the total exports of rubber gloves from Malaysia in 2010.
The average price of rubber gloves exported increased five per cent in 2010, year-on-year.
In 2010, the exports of condoms recorded RM282 million, an impressive increase of 21 per cent compared to the 2009 value of RM234 million. – Bernama
(Source: http://www.btimes.com.my/Current_News/BTIMES/articles/20110329172123/Article/index_html)
Monday, March 28, 2011
Asia rubber: china turns to inventory; floods hit thailand
Singapore (march 29, 2011) : a few cargoes of thai, indonesia and malaysian tyre grade changed hands at around $5 a kg, but main buyer china turned to domestic inventory, which was being offered at discounted prices, dealers said on monday.
prices of tyre grade have dropped more than 12 percent since striking a record above $6 in february, as economic concerns triggered by the unrest in the middle east and worries about the impact of a deadly earthquake in japan on demand spurred selling on the tokyo commodity exchange.
although floods in main producer thailand and the dry wintering season in indonesia and malaysia could offer support, a lack of buying interest from china as well as volatile futures were a cause of concern. "china has been quiet. i understand local dealers are selling rubber at discounted levels," said a dealer in singapore, who trades indonesian grade.
"in thailand, supply of raw material is down because of wintering and flooding. but we understand this market is fund driven. they are powerful enough to keep driving the market down. it's a very strange market." the new benchmark september 2011 contract on tocom was at 407.3 yen a kg by 0633 gmt, having started trading at 436 yen. the contract, which debuted on monday, was well below a lifetime high around 535 yen struck in february.
all japanese automakers have suspended or slowed vehicle and parts production since the march 11 earthquake off japan's north-eastern coast caused hundreds of suppliers' factories to shut down. deutsche securities slashed its forecast for toyota motor corp's operating profit for next business year by 84 percent and cut its forecasts for other japanese automakers assuming a prolonged production suspension after japan's biggest earthquake on record.
indonesian sir20 grade was traded late on friday at $5.12 to $5.13 a kg for april shipment. there were no deals on monday and dealers were expected to slash the offer prices later in the day as tokyo futures tumbled. thai rss3 for may delivery was done at $5.66 a kg, down from a lifetime high at $6.40 seen in february.
malaysian smr20 was traded at $5.30 for april. "china is not around. they can get cheaper rubber at the domestic market at a discount of 15 to 20 cents to the physical prices in southeast asia," said a dealer in thailand's southern city of hat yai. "the weather is a bit erratic this year. some areas were flooded over the weekend," said the dealer, adding that there were no reports of damage. rubber inventories in warehouses monitored by the shanghai futures exchange fell 20.9 percent to 33,198 tonnes last week as local tyre makers used up domestic stocks.
weekahead dealers expected purchases from tyre makers in europe and the united states to offset a slowdown in demand from china, but declines on tokyo futures could weigh on sentiment. "china can buy cheaper rubber locally. we don't expect to sell anything to them," said another dealer in singapore.
NR Production Takes Seasonal Dip - ANRPC
Production of natural rubber has reduced in recent weeks, according to the March edition of NR Trends and Statistics, published by the Association of Natural Rubber Producing Countries (ANRPC). The publication is available to subscribers only.
ANRPC said, "supply has tightened further, largely on seasonal wintering of trees, the demand prospects are clouded by concerns over potential economic implications of geopolitical events and prolonged abnormality in Japan."
It added, "ANRPC’s [estimate of] total production of NR is now expected to reach 10.06 million tons during this year, up 6.2 percent from 9.47 million tons in the year before."
The publication said, "Seasonal shortage in supply is severely felt in March and April every year. These two months respectively account for merely 4.8 percent and 5.8 percent of the annual output as compared with the monthly relative shares of 10 to 11 percent for October, November and December." ANRPC said supply tightmess is expected to coninue into April.
(European Rubber Journal, March 28, 2011)
Tokyo rubber futures hit 1-week low
Singapore (march 29, 2011) : tokyo rubber futures dropped to their lowest in more than a week on monday as worries about falling demand spurred selling, but erratic weather in southeast asia could offer support in coming days. the new benchmark rubber contract on tokyo commodity exchange, september 2011, debuted on monday and opened at 436 yen a kg before falling as low as 401.8 yen a kg, its weakest since march 18.
the contract settled at 409.3 yen a kg after it failed to rise above last week's high around 446.9 yen despite a weaker yen. "in addition, demand from the japanese auto sector is expected to fall as their operations are suspended due to the quake," said hiroyuki kikukawa of nihon unicom. the most active contract had settled 6.8 yen lower at 429.6 yen a kg on friday - well below a record around 535 yen struck in february.
the most active rubber contract on shanghai rubber futures, september 2011 ended at 34,150 yuan a tonne, versus friday's close of 35,555 yuan, tracking losses on tocom. in the physical market, indonesian sir20 grade was traded late on friday at $5.12 to $5.13 a kg for april shipment. thai rss3 for may delivery was done at $5.66 a kg, down from a lifetime high at $6.40 seen in february.
Tokyo NR Prices Sink Below $5 Over Weekend
Prices on Tokyo’s rubber exchanges moved downward over the weekend.
On Tokyo's Tocom Exchange, prices for the six-month contract closed down about yen 28 at yen 405 ($4.95) per kg on Monday, 28 March. April contracts finished down by 20 yen at yen 423 ($5.17) per kilo.
In Singapore, Sicom said short-dated RSS3 prices closed level at around $5.65. Short-dated TSR 20 also remained unchanged, closing at $5.13
India's NMCE prices increased, with April deliveries finishing at around Rs 226 ($5.08) per kilo
Shanghai Futures Exchange also moved down, with the highest price recorded at yuan 36.8 ($5.60) per kilo for short-dated contracts. Longer-dated contracts also moved down, finishing at around Yuan 35.
(European Rubber Journal, March 28, 2011)
Bridgestone Restarts Production At Final Quake-Affected Plant
The factory output will be increased gradually based on electricity restrictions and other issues.
The plant makes passenger car tyres, motorcycle tyres and others.
(European Rubber Journal, March 28, 2011)
Rubber board unveils planting scheme
Regional director Ismail Ibrahim said Malaysia was now facing acute shortage of high-yielding rubber clones.
“There is not enough rubber seeds to produce the planting materials. The situation is very serious,” he told StarBiz yesterday.
Rubber seeds, which are mainly produced by old estates, are now sold at RM2.50 to RM3.50 per kg.
Ismail attributed the shortage in rubber seeds to lower production due to the change in weather pattern, over-tapping of rubber trees and inadquate or non-application of fertilisers that had adversely affected flowering.
Ismail said MRB would establish a 50ha rubber seed production area in Similajau, Bintulu, to produce its own seeds.
“It will take 30 to 36 months to produce the seeds if we follow good agricultural practices.”
He said MRB was stepping up the production of high-yielding rubber clones with the recent establishment of its Similaju station and Malaysian Rubber Budwood Centre (MRBC) the country's first in Bintulu.
Plantation Industries and Commodities Minister Tan Sri Bernard Dompoksaid the 1,180ha station and 45ha MRBC, which he launched two months ago, would be the catalysts for rubber cultivation in Sabah and Sarawak.
MRBC is expected to produce 3.24 million rubber budwoods per year, focusing on high-yielding and quality latex clones like RRIM 3001, RRIM 928, RRIM 929 and PB 350. It will also produce timber clones such as RRIM 2023 and RRIM 2025.
Dompok's ministry is targetting 500,000ha in Sarawak and 300,000ha in Sabah to be planted with high-yielding rubber trees by 2020.
Sarawak Deputy Chief Minister Tan Sri Alfred Jabu, also state Modernisation of Agriculture Minister, said last week that 26 areas in the state had been identified for the planting of high-yielding rubber clones to be sourced from Sungai Buloh, Selangor, and Kota Tinggi, Johor.
Ismail said that under the Similajau's RM2mil phase 1 project covering 30ha, the MRBC currently produced about 500,000 sticks of budwood a month.
“We are in the process of establishing another 45ha under phase 2 to increase the production of rubber budwoods. Phase 3 will cost about RM1.5mil,” he added.
He said the budwoods were supplied to private nursery operators and other industry players. MRB also supplies RRIM 2023 and RRIM 2025 to forest plantation owners in Sabah and Sarawak.
Ismail said there were now four private firms two each in Kuching and Miri certified by MRB to produce bare root stumps and polybag planting materials for smallholders.
He said these companies could increase their productions if there were advanced orders, like from government agencies, as it would take 10 months to produce the planting materials.
According to Ismail, only about 40,000ha of the existing 159,000ha rubber holdings in Sarawak were planted with high-yielding clones in the past five years. These clones can produce an average of 1,450kg per ha per year. Sarawak has some 112,000 rubber smallholders.
He sees a bright prospect for the rubber industry, which had enjoyed good prices for the past several years.
“There is very strong demand from India and China for natural rubber. The global prices of rubber correlate with those of oil. If oil prices go up, the prices of rubber will also increase,” said Ismail.
He said the current average price of tyre-grade SMR (Standard Malaysian Rubber) is about RM10.5 per kg compared with about RM6.40 per kg in 2006, RM8kg in 2008 and more than RM9 in 2009.
Unsmoked rubber sheet now fetches an average of RM9 to RM10 per kg, up from RM6 to RM7 in 2009.
There are four factories in Sarawak which collect unsmoked sheet from smallholders and process them into SMR 20 for exports.
(Source: http://biz.thestar.com.my/news/story.asp?file=/2011/3/29/business/8364614&sec=business)
Goodyear Sees Higher Capex
Goodyear Tire & Rubber Co. (GT - Analyst Report) announced that it expects to make capital expenditures of $1.1 billion–$1.3 billion in 2012 and 2013. This is up slightly from $1.1 billion–$1.2 billion in 2011.
Of the total capex, $500 million–$600 million will be spent on modernizing and expanding plants as well as on new construction every year. In 2010, the company’s capital expenditures were $944 million, up from $746 million in the previous year.
The enhanced capex is aimed at boosting tire output by 5% annually. The company intends to focus on production of high-end products in order to catch up with the likely demand trend in the industry in the next 5 to 10 years.
Goodyear also anticipates operating income of $1.6 billion in 2013 and segment operating income of $450 million in its North American tire unit in the same year.
Few days back, Goodyear announced to raise prices of its commercial truck tires by 15% and the price of tread rubber by as much as 7% from the next month. The price increases were driven by soaring prices of raw materials.
Goodyear Tire, a Zacks #3 Rank (Hold) stock, revealed a 32% decline in profit to $21 million or 7 cents per share (excluding special items) in the fourth quarter of 2010 from $31 million or 14 cents per share in the same quarter of 2010. However, the company fared well compared with the Zacks Consensus Estimate of a loss of 7 cents per share during the quarter.
The decline in profit was primarily attributable to higher raw material costs, increased selling, administrative and general expenses and unfavorable currency translation effects. The company’s cost of goods sold increased 17% to $4.19 billion, while selling, administrative and general expenses rose12% to $715 million.
Sales during the quarter appreciated 14% to $5.07 billion, higher than the Zacks Consensus Estimate of $4.88 billion. It was backed by a 4% increase in tire volume to 45 million units, which positively affected sales by $130 million.
Total segment operating income ebbed $25 million to $224 million in the quarter. This was attributable to $397 million in net higher raw material costs ($430 million before raw material cost reduction actions) and negative impact of $17 million due to unfavorable foreign currency translation effects that more than offset the benefit of $315 million due to improved price/product mix.
For 2010, Goodyear posted a narrower loss of $216 million or 89 cents per share in 2010 compared with $375 million or $1.55 per share in 2009. This compared with the Zacks Consensus Estimate of a profit of 37 cents per share.
Sales in the year zoomed 16% to $18.8 billion reflect an 8% improvement in tire unit volume, increase in sales in other tire-related businesses, primarily third-party chemical sales by North American Tire and better price/mix, offset partially by unfavorable currency translation effects.
Segment operating income was $917 million compared with $372 million in 2009 reflecting higher sales, positive impact from cost reduction actions and a significant recovery in under-absorbed fixed costs. These factors more than offset higher marketing costs, wage inflation and unfavorable foreign currency translation effects.
(Source: http://www.zacks.com/stock/news/50047/Goodyear+Sees+Higher+Capex)
China natural rubber imports down 14% in February
BEIJING (Commodity Online) : China, one of the world’s largest rubber consumers and the largest buyer of natural rubber, imported 107,218 metric tons of natural rubber in February.
According to country’s General Administration of Customs, the figure is 14 percent lower compared to same month a year ago while it was down 27 percent compared to January.
China imported 107,218 metric tons of natural rubber in February this year, down 14.4% compared with the same period of last year.
The February figure is 27% less than that in January, when the country imported 147,382 metric tons of natural rubber.
In the first two months of this year, China's natural rubber imports dropped 14.2% year on year to 254,590 metric tons, said the customs.
China mainly imports natural rubber from Thailand, Indonesia and Malaysia.
During the period from January to February, China imported 230,900 metric tons of synthetic rubber, down 6.42% from the same period of last year. Last month, synthetic rubber imports were 91,250 metric tons.
(Source: http://www.commodityonline.com/news/China-natural-rubber-imports-down-14-in-February-37620-3-1.html)
Synthetic rubber demand rises by 13% in Dec
NEW DELHI, MARCH 28:
The country’s synthetic rubber consumption has risen by 13 per cent to 35,865 tonnes in December 2010, outstripping domestic supply of 9,463 tonnes in the same period, according to the Rubber Board.
Synthetic rubber production and demand stood at 8,912 tonnes and 35,865 tonnes, respectively, in the same period previous year, the Board’s data showed.
Synthetic rubber is mostly used in the manufacturing of tyres in the country. The industry consumed 26,278 tonnes of the produce in December 2010 alone, it said.
According to the Rubber Board, demand for synthetic rubber also jumped significantly by 23.37 per cent to 3,06,620 tonnes till December 2010 of this fiscal, as against 2,48,520 tonnes in the year-ago period.
Meanwhile, the overall production of synthetic rubber has increased only by three per cent to 81,604 tonnes from 79,263 tonnes in the review period, it said.
India, the world’s second biggest consumer of natural rubber, imported 25,087 tonnes of synthetic rubber in December 2010, up by 4.25 per cent from 24,063 tonnes in the year-ago period. Currently, the country has stock of 39,035 tonnes of synthetic rubber.
(Source: http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article1578344.ece)
NMCE Rubber ends higher on short covering
NMCE rubber futures traded positive on active short covering after witnessing a huge fall on Saturday. Futures started the day on positive note on short covering. Positive trend in domestic spot market also supported the prices to recover. However, TOCOM futures market remained down and ended in red on Friday. Thus, negative cues from international market limited the gain at NMCE.
The rubbers futures are projected to continue the positive trend on active short covering on Monday. However, TOCOM August futures are trading down at ¥416.0 per Kg. on strong selling interest. Domestic spot market has also reported a significant upsurge in prices which might support the Indian futures to trade higher. However, negative cues from TOCOM might weigh on prices later in the day.
Factors to Watch For
As per deputy head of the China Rubber Industry Association, Natural-rubber demand in China, the biggest consumer, will rise 8% this year. Consumption will be 3.24 million metric tons, while tire output will climb 7.9 percent to an all-time high of 453 million units
As per the Committee on rubber policy of Thailand Government, Thai government will negotiate with commercial banks to extend loans to exporters to buy rubber from farmers at a minimum price of 120 baht per Kg
According to rubber board of India, Indian February Natural Rubber Output is 54,500 Tons Vs 51,500 Tons, consumption is 79,000 Tons Vs 76,350 Tons and imports are 6,831 Tons Vs 12,278 Tons
As per data released by rubber board, the year end deficit in natural rubber in India is estimated around 1.2 lakh tons and it is expected to be increase to 2 lakh tons during 2011-12
According to Rubber Research Institute of Thailand, ribbed smoked sheet prices gained for a fourth day, up by 6.4% to 170 baht a kilogram on Tuesday
According to the Association of Natural Rubber Producing Countries, Consumption in China, India and Malaysia, representing 48% of global usage, will increase this year
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE April contract, prices are rising while volumes and open interest are falling. Market is running out of traders willing to open or hold an OPEN LONG/BUY. Traders are liquidating both loosing short positions & closing winning long positions. A higher probability the market is set to retrace in price lower at some point.
Japan Futures (TOCOM)
The TOCOM active August contract, prices and volumes are falling while open interest is rising. It is a good indication that a sharp rally against downtrend will develop creating a sell point for downtrend
Shanghai Futures (SHFE)
The SHFE active July contract, prices and open interest are falling while volumes are rising. Market is running out of traders willing to open or hold an open short/ sell. Traders are liquidating both loosing long positions & closing winning short positions. A higher probability the market is set to retrace in price lower at some point forward.
Rubber sector puts future in focus
The area of rubber tree plantations increased rapidly from 1980-2010, with an annual average rise of 7.7 per cent in area and 10.7 per cent in output, said Pham Van Tinh, deputy director of the National Agricultural Extension Center.
During the period, rubber yields also rose strongly from 703 kilos per ha in 1980 to 1,720 kilos per ha last year.
Rubber tree development has improved the incomes of more than 130,000 farm labourers and more than 143,000 farmer households, Tinh said.
Although the sector has flourished in recent years, the sector faces problems compared other countries in the region, he said.
The current rush to plant the tree, without suitable land for cultivation, coupled with excessive exploitation, may cause a lower yield and quality in the future, threatening sustainable development for the sector, he said.
"This requires localities to quickly create a zoning plan for rubber plantations and urge farmers to strictly follow a plan and not cultivate the tree on any land when there is a rubber-price surge," said Dr Nguyen Anh Nghia, head of the Rubber Research Institute of Viet Nam's Crop Protection Division.
He also urged localities to improve agricultural-extension activities and give instruction in proper plantation techniques for seed selection, plantation, and harvesting.
Demand for natural rubber in the world market is expected to continue to increase until 2012, however, the planting should not be done indiscriminately, said Tran Thi Thuy Hoa, VRA's general secretary.
Currently, the export price of Vietnamese natural rubber is lower than that of Malaysia, Thailand and Indonesia because importers blamed the inconsistent quality of Vietnamese products, Hoa said.
"The country, therefore, should improve the quality management system for preliminary processing of natural rubber and support farmers to improve the quality of their rubber raw materials in line with national and international norms to enhance the sector's competitiveness," she said.
Supply shortage
The world's natural rubber output this year is expected to increase by 6.2 per cent from last year but is still low compared to the demand for latex, Hoa said.
Supply shortage has pushed up rubber prices in recent years, she said.
Though the price slightly fell this month due to a political crisis in Libya and the earthquake in Japan, it still stands at more than US$5,000 per tonne.
Currently Viet Nam is the world's fourth largest exporter of natural rubber, exporting 782,200 tonnes last year, earning $2.28 billion.
China is the largest buyer of Vietnamese rubber, accounting for 59 per cent of the country's total rubber exports.
Besides latex, last year the country also earned more than $300 million from exports of rubber wood-based products, accounting for about 10 per cent of total wooden products' export revenue, she said.
The country last year had 740,000 ha of rubber plantations, an increase of 62,300ha over 2009, mainly located in southeastern provinces.
The Government has created a master plan to develop the industry until 2015 with a vision to 2020.
Accordingly, the country targets having 800,000ha under rubber cultivation by 2015, producing more than 1.2 million tonnes of natural rubber per year by 2020. — VNS
(Source: http://vietnamnews.vnanet.vn/Economy/209759/Rubber-sector-puts-future-in-focus.html)
Japan TOCOM March Rubber Deliveries Highest Since Jan 2007
Deliveries against the March rubber futures contract on the Tokyo Commodity Exchange jumped 50 percent from February to 466 lots or 2,330 tonnes, the exchange said on Friday (Mar 25), the highest since 516 lots of deliveries in January 2007.
February deliveries were 310 lots or 1,550 tonnes.
The March TOCOM rubber futures contract expired at 446.4 yen per kg, down 14 percent from February contract's 518.8 yen expiry price.
The benchmark August contract settled down 6.8 yen or 1.6 percent at 429.6 yen.
The newly listed September contract will be the benchmark when it starts trading on Monday (Mar 28).
(Reuters, March 25, 2011)
IRCo's WEEKLY MARKET SNAPSHOT: 21 - 25 March 2011
IRCo's DCP recovered throughout the week and returned to stay above its 14-day moving average again on Friday while cash prices on physical markets in the region also followed suit as well as Thai rubber futures (AFET) and Shanghai rubber futures but Tokyo rubber futures after rubber market fundamentals could outweigh bearish market sentiments over the week.
Global stock markets still wobbled in the wake of persistent geopolitical turmoil in the Arab world and the latest report on a leak of radioactive water in and around the Fukushima Daiichi nuclear complex on the weekend. However, a report on better-than-expected U.S. economic growth of 3.1% in 4Q10 and high U.S. corporate earnings could lend support for the global stock markets somewhat.
Oil prices continued rising and ended the week on Friday at US$105.40 a barrel on Nymex due to investors' concern about oil supply disruption in the coming months. Barclays Capital analysts late Thursday forecast Brent crude would hit US$120 a barrel in 2Q11, with the U.S. benchmark averaging US$133 a barrel. On the following day, J.P. Morgan analysts warned that higher oil supplies from OPEC would be needed to meet summer demand, and Brent crude is likely to reach US$130 a barrel.
On the forex market, the Japanese yen, Thai baht, Indonesian rupiah, and Malaysian ringgit moved firmly over the week without much interference from the dollar and euro. The Japanese yen stayed in a range of about 81 yen a dollar while the Thai baht, Indonesian rupiah and Malaysian ringgit stayed at around 30.26 baht, 8,714 rupiah, and 3.27 ringgit against a dollar.
(Source: http://www.irco.biz/MarketWise.php)
Deutsche Cuts Toyota, Other Carmakers' Forecasts
Deutsche Securities slashed its forecast for Toyota Motor Corp's operating profit for next business year by 84 percent and cut its forecasts for other Japanese automakers assuming a prolonged production suspension after Japan's biggest earthquake on record.
In a note to clients, Deutsche's Tokyo-based auto analyst, Kurt Sanger, stressed that uncertainty over the depth and duration of the supply disruption meant "we will surely be wrong in our absolute figures."
"Ultimately this is a definable problem with a solution and should be one that the market can look beyond. We expect near-term volatility but we do not see permanent impairment to corporate value," he wrote. Forecasts for the 2012/13 April-March business year were only slightly lowered.
Sanger said he was basing his assumptions on a return to normal production after six months, with energy shortages presenting challenges on top of a broad disruption to the supply chain.
All Japanese automakers have suspended or slowed vehicle and parts production since the March 11 earthquake off Japan's northeastern coast caused hundreds of suppliers' factories to shut down.
Below are Deutsche Securities' forecasts for operating and net earnings, in billions of yen. The companies' business year runs from April 1 to March 31.
Toyota Motor Corp
Nissan Motor Co 
Honda Motor Co
Suzuki Motor Corp
Mazda Motor Corp 
Fuji Heavy Industries (Subaru)
(Reuters, March 28, 2011)
Shanghai Warehouse Rubber Stocks Down 20.9 Pct
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 20.9 percent from last Friday (Mar 18), the exchange said on Friday (Mar 25).
Changes in metals stocks are reported as follows:
DELIVERABLE ON WARRANT 
(Reuters, March 25, 2011)
Rubber Exports to Japan are Safe
TEMPO Interactive, Jakarta:Indonesia’s raw rubber exports to Japan are secure despite the closure of several automotive factories in Japan. “There have been no reports of exports being suspended to Japan,” said Suharto Honggokusumo, the executive director of the Indonesian Rubber Producers Association (Gapkindo), in Jakarta yesterday.
Last year, Indonesia’s rubber exports stood at 2.4 million tons and were valued at US$7 billion. The growth of Indonesia’s rubber export volume during 2004 – 2010 was 8 percent. Rubber prices are high on the international trade market at US$ 5.2 per kilogram.
(Source: http://www.tempointeractive.com/hg/nasional/2011/03/28/brk,20110328-323254,uk.html)
Subscribe to:
Posts (Atom)