Asian Physical Rubber Prices On May 25

Asian physical rubber prices were steady on Wednesday (May 25) despite bullish futures prices in Tokyo and Shanghai as thin demand on the physical front weighed on the market, dealers said.

Most buyers stayed on the sidelines, expecting prices to dip as supply rises in coming weeks, they said.

PRICES OF PHYSICAL RUBBER COMPARED TO MAY 24

Grade		Price		Change
Thai RSS3 (June)		$5.10/kg		unchanged
Thai STR20 (June)		$4.55/kg		unchanged
Malaysia SMR20 (June)		$4.55/kg		unchanged
Indonesia SIR20 (June)		$2.05/lb		unchanged
Thai USS		145 baht/kg		+5 baht
Thai 60-percent latex (drum/June)		3,300/tonne		unchanged
Thai 60-percent latext (bulk/June)		$3,200/tonne		unchanged

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, May 26, 2011)

India: Lack of buyers weakens spot rubber

KOTTAYAM, MAY 25:

Spot rubber weakened on Wednesday. The market continued to shed the gains as there were no positive signals to trigger an uptrend either from the domestic or international scene. There has been selling from dealers and growers but the trading volumes were low in the absence of quantity buyers on any grade.

Sheet rubber declined to Rs 217 (218) a kg according to traders. The grade slipped to Rs 217.50 (218.50) a kg both at Kottayam and Kochi, according to the Rubber Board.

The June series concluded the session at Rs 218.40 (218.87), July at Rs 221.65 (221.82), August at Rs 220.50 (220.85), September at Rs 217.08 (216.70), October at Rs 210 (212.25) and November at Rs 214 (211) a kg for RSS 4 on the National Multi Commodity Exchange.

The key Tokyo rubber futures bounced back in tune with other commodities, while market participants kept a close eye on Shanghai futures to assess the demand from China.

The May futures for RSS 3 expired at ¥408 (Rs 225.52) a kg while the June futures improved to ¥409 (Rs 226.03) from ¥403.5 during the day session and then to ¥414 (Rs 228.79) a kg in the night session on the Tokyo Commodity Exchange. RSS 3 (spot) closed at Rs 231.17 (230.25) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 217 (218); RSS-5: 214 (216); ungraded: 212 (213); ISNR 20: 209 (211) and latex 60 per cent: 130 (131).

Source: http://www.thehindubusinessline.com/industry-and-economy/agri-biz/article2048732.ece

NR prices rebound

Tokyo -- Prices on Tokyo’s rubber exchanges rose once more overnight.

On Tokyo's Tocom Exchange, prices for the six-month contract increased by about yen 8, trading at yen 388 ($4.73) per kg on Wednesday 25 May. Shorter-dated prices remained unchanged, trading at around 412.

In Singapore, SGX said short-dated RSS3 were trading up by 2 cents at around $5.10 with longer-dated contracts down slightly at around $4.89. Short-dated TSR 20 was trading up at $4.54.

In India, the NMCE saw June deliveries rise by Rs 2, to close at around Rs219 ($4.82) per kilo

In China, the Shanghai Futures Exchange also saw prices rise by a fraction of a yuan, with June deliveries trading at around Yuan 34.5 ($5.31) per kilo

Source: http://www.european-rubber-journal.com/fullitem.aspx?id=115676

State-of-the-art tire rubber helps save fuel

Mumbai, Maharashtra, May 25, 2011 /India PRwire/ -- At a time when natural resources are becoming ever scarcer, the efficiency with which our vehicles transfer the engine's propulsion energy to the road plays an increasingly important role. Tires, which serve as the link between the engine and the asphalt, naturally play a key part. On freeways, tires currently account for around a fifth of fuel consumption, and in urban traffic, this figure can be as high as 30 percent. Specialty chemicals company LANXESS, a pioneer in the field of synthetic rubber, already markets rubber raw materials that can substantially reduce these figures. Examples include new grades of butyl rubber (IIR), modified solution styrene-butadiene rubber (SSBR) and advancedneodymium-polybutadiene rubber (Nd-BR).

"Developing new grades of tire rubber that help save energy but at the same time offer an equally high level of safety is a task for experienced chemists," says Christoph Kalla, head of Marketing & Research in the Performance Butadiene Rubbers business unit at LANXESS, "because some of the key properties of a tire are very difficult to optimize without impairing others. For example, it used to be a big problem to improve rolling resistance - a measure of the energy loss through the tire - without impairing abrasion resistance and wet grip. Thanks among other things to our many years of experience in this sector, rubber chemists have nevertheless made very good progress towards "squaring the circle". We anticipate that the rolling resistance of the next tire generation can be lowered by up to 10 percent merely by using currently available high-performance grades of tire rubber. Naturally without having to make any compromises on vehicle safety - quite the opposite in fact!"

The cause of high rolling resistance may be high internal friction of tire components. The "expander cord" effect can also play a part: If a rubber contains too many molecules with loose ends, it cannot make optimal use of the energy. These loose ends, much like torn expander cords, contribute virtually nothing to transmitting forces in the tire, yet they still have to be moved along.

It should be possible, for example, to reduce the internal friction of the silica gel filler particles that give the rubber its stability with the help of modified SSBR rubber from LANXESS. Expressed in layman's terms, the molecules of these rubber raw materials have a high density of "sticky" anchor points that stick particularly well to the hard filler particles and basically cover them with a thick, friction-reducing rubber skin. This "wrapping-up" of the silica gel particles optimizes the polymer/filler network, and this should have a positive effect on road grip and abrasion. Initial laboratory and practical tests indicate that tires made of these materials not only have good rolling resistance, they also give outstanding grip. On top of that, they have a very long service life.

The number of "loose ends" in the rubber matrix is, in turn, much lower in Nd-BR rubber from LANXESS than in other grades of tire rubber. What's more, because of complex physical relationships (more specifically, a narrow molecular weight distribution), producers can now manufacture tires with outstanding physical data using rubber raw materials that are also easier to process than before. At the same time, the latest grades of Nd-BR rubber from LANXESS result in more uniform, homogeneous products than many polybutadiene rubber types of former generations.

Finally, largely air-impermeable grades of LANXESS butyl rubber help keep tire pressure constant for a longer time. New IIR grades from LANXESS can, through their higher isoprene content, be vulcanized better than present products in the manufacturer's portfolio.

"These are just three recent examples from the LANXESS range," says Kalla. "We never stop subjecting our products to further development. We have dedicated ourselves to rubber, and our business success is therefore closely linked to our acknowledged innovative strength in this field." Another topical focus of R&D is specifically varying the molecular microstructure of styrene-polybutadiene tire rubber. New catalysts and increasingly sophisticated process engineering will help to further lower the rolling resistance of new high-performance tires, and thus help to extend, for example, electric vehicles' range, at the same time making them safer.

"However," continues Kalla, "the term 'sustainability' should not be reduced solely to the question of fuel consumption. Avoiding waste, for instance, is another important aspect of sustainability." Here, too, modern, high-performance grades of Nd-BR rubber from LANXESS offer a number of advantages: For example, they cushion confrontations with curbs better than many other rubber materials, which means that not only do they enhance safety, they also avoid waste. On the subject of life expectancy and mileage, LANXESS also has special tire rubber masterbatches in its portfolio that make the retreading of tires easier. That also saves valuable raw materials. Finally, the use of particularly abrasion-resistant grades of rubber in the tread contributes to good environmental performance, because they not only extend the service life of the tire, they also help reduce the fine dust problems in our towns and cities.

Notes to Editor

About LANXESS

LANXESS is a leading specialty chemicals company with sales of EUR 7.1 billion in 2010 and currently around 15,500 employees in 30 countries. The company is at present represented at 46 production sites worldwide. The core business of LANXESS is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.

Forward-Looking Statements.

This news release may contain forward-looking statements based on current assumptions and forecasts made by LANXESS AG management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

Source: http://www.manufacturing.net/News/Feeds/2011/05/mnet-mnet-industry-focus-supply-chain-state-of-the-art-tire-rubber-helps-save-fuel/

ANALYSIS: Could global butadiene prices be set to fall?

The global butadiene market is currently enjoying record high prices, with the US Gulf Coast, Europe and Asia all trading at previously unseen price levels in recent weeks.
Yet there were signs of a potential fall in the global value of butadiene as Asian sources reported weakening Chinese demand this week, while there were fears in the US Gulf Coast market that imported natural rubber demand could dampen previous strong demand for butadiene.
All three major regions have been trading at all-time highs. For the week ending May 20 spot CIF US Gulf Coast prices closed at 192.50 cents/pound ($4,232/mt). This compared with a spot price of 108 cents/lb on May 21, 2010, when the market was also considered as tight. In Europe, the FOB Rotterdam market closed at Eur2,795/mt ($3,932/mt) Tuesday versus Eur1,695/mt this time last year. Meanwhile the FOB Korea market was valued at $3,799/mt at close May 20, $1,598/mt higher than the same time last year.
But sources in Asia have recently begun to report a slowdown in Chinese buying, with demand falling from the onset of May as the market has become well-supplied, said local sources. An end-user was offered a 1,500 mt spot cargo from Sinopec Maoming for about $3,450-3,500/mt CFR China last week and there were few parties interested in the parcel. The spot cargo was in the market for more than a week, the end-user said.

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A trader added: "Korean producers are looking for up to $4,000/mt, but in China it is much lower. Producers are offering at $3,400/mt FOB China. The only domestic demand in China is from distributors, not end-users. Up until May, Chinese buying was at maximum capacity, but it is now totally different to that."
According to sources the downturn in buying in China has been brought on by the cash liquidity crisis in the country, which has reduced credit facilities of buyers.
Market participants say that the slowdown in demand is caused by lower cash flow and loan availability in the Chinese financial system. China has implemented various steps -- including raising interest rates and banks' reserve rate ratios -- to tame inflation.
"There are less loans available now," said a producer. "And buyers are holding off from buying."
Other sources felt that the high price of butadiene has also played a part in the Chinese slowdown. One source said: "[Acrylonitrile butadiene styrene] producers can't cover the cost of butadiene and butadiene rubber producers can't cover the costs either. Only styrene butadiene rubber producers are ahead. Surely that means a fall in June and July."
The lack of Chinese buying has not weakened other Asian markets however, thanks to strong global demand from both the US Gulf Coast and Europe. This has lead to the FOB Korea market to be price on a net back to the US.
Prices climbed last week with Korean producers selling at $3,700/mt and $3,800/mt FOB Korea. Both parcels were bought by traders moving product to the US sources said.
There has been no sign of any fall from those levels, and one Korean producer said this week: "Deep sea offers to the US are still at $3,700-3,800/mt FOB Korea and we have already sold out our spot product for June."
The producer acknowledged, however, that "China is still not good," but said that any potential downturn in Asian butadiene prices would be a reaction to the US -- not local markets.
The producer said: "I think [forward price direction] depends on the US market. There are still many traders seeking butadiene for the US. If the US market becomes bearish then the recent high prices will adjusted downward. But for July, the US market is still good," the producer said.
Other Korean producers acknowledged that should they be forced to sell locally prices would drop significantly without the support of the US market.
One producer said: "I feel the last FOB deal prices, could be the ceiling. A big gap exists between Asia and out-of-Asia. So almost all the Korean producers focus on out of Asia. If the deep sea market closes, then the [FOB Korea] butadiene price will adjust."
The outlook for the US was mixed with one US butadiene source saying the spot price in the US is "holding right now, but it's definitely not going up."
According to sources the demand for butadiene in the US has been muted somewhat by fears that imported rubber from Asia could dampen demand for butadiene in the US. "There are some real concerns that finished rubber from Asia -- if enough is sent to the US -- will make it impossible for [US butadiene converters] to pass on the higher butadiene prices." one converter said.
Butadiene derivative SBR can be used as a replacement for natural rubber, in areas such as tire manufacturing. For much of the year to date, natural rubber pricing has been higher than butadiene, stoked by fears of a global shortage or product.
According to sources, TSR (technically specified rubber) grades 10 and 20 are the most likely rubber grades to be replaced by butadiene in relevant applications. For much of the year to date natural rubber prices have been at a premium to butadiene, a factor which also helped create record high butadiene prices.
TSR20 prices touched $6,000/mt, following a spike which began during the final quarter of 2010. Although the Singapore commodity exchange value for TSR20 rubber futures for June 2011 closed at $4,542/mt May 24, there had previously been a drop in prices to as low as $3,500/mt, also caused by a fall in Chinese demand.
One natural rubber trader explained: "There has been some availability from China, where demand has been reduced by the cash liquidity crisis. Because of this, there has been some exports of local product to the US. China consumes 30-35% of natural rubber produced, so even a 10% reduction in demand can make a big impact."
Despite this, there appeared no widespread fall in demand from US buyers. One Korean producer said Friday: "I've got several bids from the US for early July and prices were also rising according to sources.
The US spot price for butadiene last week was assessed at 182.50 cents/lb CIF USG, about 40 cents above the May contract price. A source this week said the spot price was approaching 200 cents/lb ($4,408/mt), but was unlikely to go much higher because of the potential demand destruction caused by imported Asian rubber.
Looking ahead although natural rubber production was picking up according to sources, one trader believed that Chinese buying would increase in June and said: "I think we are at the bottom of the downwards trend."
US butadiene consumers who buy on a contract basis, though, could expect higher prices in June though. No June nominations were heard in the US market as of Thursday, though speculation was for a 10 to 15 cent increase, which would push the US butadiene contract as high as 160 cents/lb.
European prices also remained strong this week as supply tightness meant that consumers were competing with the US for spot butadiene cargoes.
One end-user was offered a 3,500 mt parcel for $4,000/mt from Haldia, India, arriving early June, but had turned it down as current requirements were fulfilled by contract cargoes. On Thursday, the European spot market was placed at about Eur2,700/mt ($3,854).
In addition, European traders were also able to take advantage of US demand and prices.
Low crude C4 supplies in the US are also drawing the butadiene feedstock away from Europe. Early May, the Nordic Gas loaded a mixed butadiene/raffinate/CC4 cargo from Northwest Europe to the US Gulf while at the end of May, the Maersk Humber will load 9,000-10,000 mt of crude C4 from Aliaga, bound for Houston.

Source: http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Petrochemicals/8923459

Vietnam Rubber Exports Forecast at 40,000 Tons in May

Vietnam, the fourth-biggest rubber exporter in 2010, may ship 40,000 metric tons this month, according to figures today from the General Statistics Office in Hanoi.

The nation shipped 36,000 metric tons in April, 20 percent lower than a previous assessment of 45,000 tons, revised figures from the Statistics Office show. Exports in the first five months were 240,000 tons, up 31 percent from a year earlier.

Source: http://www.bloomberg.com/news/2011-05-25/vietnam-rubber-exports-forecast-at-40-000-tons-in-may.html

Vietnam Natural Rubber (SVR) F.O.B. price May 25, 2011

Source: http://vnb-blog.blogspot.com/2011/05/vietnam-natural-rubber-price-25052011.html