Commodities Technical Analysis | NMCE Rubber Intraday Outlook | 31 August 2009 | www.commodityonline.com
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Rubber futures in NMCE advanced further on Saturday on good buying support. Domestic rubber futures surged around 6 percent last week as rallies in crude oil and stocks boosted optimism for an economic recovery, increasing demand for the commodity used to make tires.
A government board in India expressed confidence that, rubber production in India, the world’s fourth-biggest grower, will increase from September and meet a target for a full-year gain as latex yield improves during cool weather.
Natural rubber production in India dropped 10.9 per cent during the first seven months of the current year. Production was 8.32 lakh tonnes of rubber during the 12 months to July, which was a 5.6 per cent fall over the corresponding period of last year.
The imports of rubber stood at 51,000 tonnes on July 9, and that compared with 21,000 tonnes imported during the same period of last year. Exports, on the other hand, stood at just 1,000 tonnes compared to 15,000 tonnes. Lower exports and higher imports have pushed up the stock level to 1.9 lakh tonne by the end of June as compared to 1.4 lakh tonne during the same period last year.
Meanwhile, global rubber production registered a fall of 4.6 per cent till July. Malaysia registered 17 per cent fall. Production fell by 12.4 per cent in Thailand during the six month period. Indonesia’s natural rubber output fell by six per cent during the first half of the year. Vietnam witnessed a 7.3 per cent fall in January-July period. The Vietnam Rubber Association expects a five per cent production shortfall to persist until October.
China and Sri Lanka are the only two countries to show a growth in production and have helped to cu shion the global shortfall. China has recorded a 54 per cent growth in production.
NMCE rubber moved in the range of Rs11020-10925 last traded at Rs.11005 (10919) Open interest decreased by 9 to 1213. Rubber stocks at NMCE accredited warehouses increased by 22 to 160 Mt.
INTRADAY OUTLOOK
NMCE Rubber September futures support lies at 109.45 and 108.88. Resistance is at 110.45 and 110.78.
Monday, August 31, 2009
Monday, August 24, 2009
NMCE Rubber Intraday Outlook
Commodities Technical Analysis | NMCE Rubber Intraday Outlook | 24 August 2009 | www.commodityonline.com
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Fears of shortfall in production once again push up rubber prices in NMCE on Saturday.
Natural rubber production in India dropped 10.9 percent during the first seven months of the current year. Production was 8.32 lakh tonnes of rubber during the 12 months to July, which was a 5.6 per cent fall over the corresponding period of last year.
The imports of rubber stood at 51,000 tonnes on July 9, and that compared with 21,000 tonnes imported during the same period of last year. Exports, on the other hand, stood at just 1,000 tonnes compared to 15,000 tonnes. Lower exports and higher imports have pushed up the stock level to 1.9 lakh tonne by the end of June as compared to 1.4 lakh tonne during the same period last year.
Meanwhile, global rubber production registered a fall of 4.6 per cent till July. Malaysia registered 17 per cent fall. Production fell by 12.4 per cent in Thailand during the six month period. Indonesia’s natural rubber output fell by six per cent during the first half of the year. Vietnam witnessed a 7.3 per cent fall in January-July period. The Vietnam Rubber Association expects a five per cent production shortfall to persist until October.
China and Sri Lanka are the only two countries to show a growth in production and have helped to cushion the global shortfall. China has recorded a 54 per cent growth in production.
NMCE rubber moved in the range of Rs10375-10283 last traded at Rs.10368 (10275) Open interest decreased by 14 to 1493. Rubber stocks at NMCE accredited warehouses increased by 17 to 107 Mt.
INTRADAY OUTLOOK
NMCE Rubber September futures support lies at 103.05 and 102.50. Resistance is at 104.00 and 104.35
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Fears of shortfall in production once again push up rubber prices in NMCE on Saturday.
Natural rubber production in India dropped 10.9 percent during the first seven months of the current year. Production was 8.32 lakh tonnes of rubber during the 12 months to July, which was a 5.6 per cent fall over the corresponding period of last year.
The imports of rubber stood at 51,000 tonnes on July 9, and that compared with 21,000 tonnes imported during the same period of last year. Exports, on the other hand, stood at just 1,000 tonnes compared to 15,000 tonnes. Lower exports and higher imports have pushed up the stock level to 1.9 lakh tonne by the end of June as compared to 1.4 lakh tonne during the same period last year.
Meanwhile, global rubber production registered a fall of 4.6 per cent till July. Malaysia registered 17 per cent fall. Production fell by 12.4 per cent in Thailand during the six month period. Indonesia’s natural rubber output fell by six per cent during the first half of the year. Vietnam witnessed a 7.3 per cent fall in January-July period. The Vietnam Rubber Association expects a five per cent production shortfall to persist until October.
China and Sri Lanka are the only two countries to show a growth in production and have helped to cushion the global shortfall. China has recorded a 54 per cent growth in production.
NMCE rubber moved in the range of Rs10375-10283 last traded at Rs.10368 (10275) Open interest decreased by 14 to 1493. Rubber stocks at NMCE accredited warehouses increased by 17 to 107 Mt.
INTRADAY OUTLOOK
NMCE Rubber September futures support lies at 103.05 and 102.50. Resistance is at 104.00 and 104.35
Tuesday, August 18, 2009
Recent Developments in Natural Rubber Prices
The current world consumption of rubber, totalling around 18 million tonnes per year, consists of 48% natural rubber (NR), 20% solid SBR, 14% latex SB, 12% polybutadiene, 5% EPDM, 2% polychloroprene, 2% nitrile and 7% other synthetics. Thus, in terms of quantity by type, NR is still the largest.
Demand for elastomers, both for synthetic rubber (SR) as well as NR, is well secured and is continuously increasing at a rate of 3-4% per year, in line with improvements in living standards around the world. Synthetic rubber is purely an industrial raw material. The producing and consuming industries are in general closely related and dominated by large and global enterprises. Being a petroleum derived product and manufactured by polymerisation process in chemical plants, the management of supply against demand is relatively straightforward. To a certain extent, the prices of its basic ingredients namely the monomers are more or less influenced by the price of petroleum.
Natural rubber, on the other hand, is also consumed as an industrial raw material. In rubber articles, the two kinds of elastomers are never distinguished by us as users. It could be natural, synthetic or blends of various rubbers in different proportions. The manufacturer of these articles are basically choosing the kinds of rubbers to be used on the grounds of technological merit and economic availability. 70% of NR and 60% of SR have been manufactured into automotive tyres.
However, natural rubber is unique in the sense that it is consumed as an industrial raw material but produced as an agricultural commodity, and now over 80% being sourced from independent smallholders. Consequently, it becomes a social commodity where more than 30 million small farmers are at stake worldwide.
Thursday, August 13, 2009
Rubber Market may get Squeezed
Rubber Market may get Squeezed: "Forecasted production cutbacks by overseas producers may squeeze the rubber m..."
Forecasted production cutbacks by overseas producers may squeeze the rubber market much tighter in 2010. The Indonesian Rubber Association says that country will reduce its output this year to 2.2 million metric tons from 2.5 million tons due to lower prices. And Thailand, Indonesia and Malaysia will cut shipments by as much as 48,000 tons a month in the second half, according to the International Rubber Consortium.
Forecasted production cutbacks by overseas producers may squeeze the rubber market much tighter in 2010. The Indonesian Rubber Association says that country will reduce its output this year to 2.2 million metric tons from 2.5 million tons due to lower prices. And Thailand, Indonesia and Malaysia will cut shipments by as much as 48,000 tons a month in the second half, according to the International Rubber Consortium.
Wednesday, August 12, 2009
NMCE Rubber Intraday Outlook
Commodities Technical Analysis | NMCE Rubber Intraday Outlook | 12 August 2009 | www.commodityonline.com
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Rubber futures in NMCE advanced for a third day, on speculation a rally in crude oil and gains in Chinas industrial production may increase demand for the commodity used in tires amid growing optimism for a global economic recovery.
Futures in Tokyo rose as much as 4.6 percent as crude oil advanced for the first time in four days, boosting the appeal of natural rubber versus synthetic product. China’s industrial production gained 10.8 percent in July, compared with a 10.7 percent advance in June.
In India, the production has seen a 13% fall in the April- June period of the current year as compared to the same period of last year. On the other hand, the consumption of rubber has increased during this period, supporting the bullish price trend.
The imports of rubber stood at 51,000 tonnes on July 9, and that compared with 21,000 tonnes imported during the same period of last year. Exports, on the other hand, stood at just 1,000 tonnes compared to 15,000 tonnes. Lower exports and higher imports have pushed up the stock level to 1.9 lakh tonne by the end of June as compared to 1.4 lakh tonne during the same period last year.
Global rubber consumption is expected to fall 7 percent in 2009 to 20.8 million tonnes, compared with an earlier forecast of an 8 percent fall, according to the secretary general of the International Rubber Study Group on Tuesday. The group forecast that world rubber consumption will grow 2.7 percent in 2010 to 21.4 million tones, compared with a 3 to 4 percent growth forecast he made on March 24.
NMCE rubber moved in the range of Rs10110-10000 last traded at Rs.10069 (9993). Open interest decreased by 96 to 1369. Rubber stocks at NMCE accredited warehouses increased by 15 to 63 Mt.
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Rubber futures in NMCE advanced for a third day, on speculation a rally in crude oil and gains in Chinas industrial production may increase demand for the commodity used in tires amid growing optimism for a global economic recovery.
Futures in Tokyo rose as much as 4.6 percent as crude oil advanced for the first time in four days, boosting the appeal of natural rubber versus synthetic product. China’s industrial production gained 10.8 percent in July, compared with a 10.7 percent advance in June.
In India, the production has seen a 13% fall in the April- June period of the current year as compared to the same period of last year. On the other hand, the consumption of rubber has increased during this period, supporting the bullish price trend.
The imports of rubber stood at 51,000 tonnes on July 9, and that compared with 21,000 tonnes imported during the same period of last year. Exports, on the other hand, stood at just 1,000 tonnes compared to 15,000 tonnes. Lower exports and higher imports have pushed up the stock level to 1.9 lakh tonne by the end of June as compared to 1.4 lakh tonne during the same period last year.
Global rubber consumption is expected to fall 7 percent in 2009 to 20.8 million tonnes, compared with an earlier forecast of an 8 percent fall, according to the secretary general of the International Rubber Study Group on Tuesday. The group forecast that world rubber consumption will grow 2.7 percent in 2010 to 21.4 million tones, compared with a 3 to 4 percent growth forecast he made on March 24.
NMCE rubber moved in the range of Rs10110-10000 last traded at Rs.10069 (9993). Open interest decreased by 96 to 1369. Rubber stocks at NMCE accredited warehouses increased by 15 to 63 Mt.
Tuesday, August 11, 2009
Is the Rubber Cartel jacking up prices?
Is the Rubber Cartel jacking up prices? | 29 July 2009 | www.commodityonline.com
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Rubber cartels have a long history and most of the attempts weren’t successful. The Brazilian rubber cartel was broken by the British who brought the seedlings and planted it in Malaysia. The International Rubber Organisation (INRO) another cartel that was formed in 1980 was dissolved in 1999.
The only prevailing cartel, the International Rubber Consortium Ltd is in existence for the past six years and they include the three largest rubber producers, Thailand, Indonesia and Malaysia. Other major producers, Vietnam, India and Brazil are not part of this cartel although efforts to include Vietnam failed.
According to various studies on commodity cartels, rubber cartel has partially succeeded because its objective has narrowed to price stability through supply-side interventions. The cartel has already announced deep cuts to supply reduction this year as recessionary trends have curbed consumption across industries. It may be recalled that an effort to form a coffee cartel failed because other countries began to get attracted to coffee crop due to higher prevailing prices.
In recent times, two factors have led to rallies in TOCOM rubber futures—one is ofcourse, the auto sector growth and consequent hike in consumption of tyres in China and secondly, the announcement in planned cuts in production by the rubber cartel. The rubber futures for December delivery shot up to 185.5 yen at TOCOM the other day, the highest since November.
In July, the rubber futures have so far gained 15% on the announcement of reduced output. Nobody can fault the producers to curb supply in tune with demand and thereby ensuring price stability. However, it should be remembered that price volatility has been intense in many other commodities including crude oil, base metals and agri-softs commodities in the Futures counter and therefore, there is no reason for rubber producers alone to panic.
Rubber cartels weakened in previous years due to the emergence of synthetic rubber as a substitute for natural rubber and more countries becoming rubber producers. According to Sajen Peter, Chairman of India’s Rubber Board, the average price of RSS 4 in 2008-09 in the domestic market was Rs.101.12 per kg as compared to Rs.103.79 per kg reported for RSS 3 in the international market. In the past one year we witnessed crude oil prices swing from $147/bbl to $35 and back to $67 now.
Compared to crude oil, rubber price realization has been more or less stable in major producing countries. Rubber is used in manufacture of over 10,000 products and ofcourse the major consumer is the automotive sector. Hence, one reason why rubber cartels don’t often succeed is because prices are also determined by underlying demand which in turn depends on global GDP growth. Although price stability is a desirable aim for any commodity including crude oil, edible commodities and plantation crops, in a recessionary phase there is no harm even if raw material prices remain lower in order for production to pick up momentum, if it finally leads to increased aggregate demand.
Thailand, Indonesia and Malaysia produced around 7 million tons of rubber last year. In ther first five months of 2009 they have already reduced output by more than 400,000 tons. Exports were cut by 540,000 tons in January to May, compared with a 414,000 ton reduction planned for the first half. El Nino is also showing signs of impacting rubber production in Malaysia and Indonesia as rains will be delayed.
Therefore, a combination of natural and supply-side interventions will keep rubber prices at stable or may be even higher levels in the coming months. But the moot question is whether the cartel has any justification to jack up prices since rubber has often provided reasonable returns to growers in the past twenty years thanks to new clones and productivity increases.
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Rubber cartels have a long history and most of the attempts weren’t successful. The Brazilian rubber cartel was broken by the British who brought the seedlings and planted it in Malaysia. The International Rubber Organisation (INRO) another cartel that was formed in 1980 was dissolved in 1999.
The only prevailing cartel, the International Rubber Consortium Ltd is in existence for the past six years and they include the three largest rubber producers, Thailand, Indonesia and Malaysia. Other major producers, Vietnam, India and Brazil are not part of this cartel although efforts to include Vietnam failed.
According to various studies on commodity cartels, rubber cartel has partially succeeded because its objective has narrowed to price stability through supply-side interventions. The cartel has already announced deep cuts to supply reduction this year as recessionary trends have curbed consumption across industries. It may be recalled that an effort to form a coffee cartel failed because other countries began to get attracted to coffee crop due to higher prevailing prices.
In recent times, two factors have led to rallies in TOCOM rubber futures—one is ofcourse, the auto sector growth and consequent hike in consumption of tyres in China and secondly, the announcement in planned cuts in production by the rubber cartel. The rubber futures for December delivery shot up to 185.5 yen at TOCOM the other day, the highest since November.
In July, the rubber futures have so far gained 15% on the announcement of reduced output. Nobody can fault the producers to curb supply in tune with demand and thereby ensuring price stability. However, it should be remembered that price volatility has been intense in many other commodities including crude oil, base metals and agri-softs commodities in the Futures counter and therefore, there is no reason for rubber producers alone to panic.
Rubber cartels weakened in previous years due to the emergence of synthetic rubber as a substitute for natural rubber and more countries becoming rubber producers. According to Sajen Peter, Chairman of India’s Rubber Board, the average price of RSS 4 in 2008-09 in the domestic market was Rs.101.12 per kg as compared to Rs.103.79 per kg reported for RSS 3 in the international market. In the past one year we witnessed crude oil prices swing from $147/bbl to $35 and back to $67 now.
Compared to crude oil, rubber price realization has been more or less stable in major producing countries. Rubber is used in manufacture of over 10,000 products and ofcourse the major consumer is the automotive sector. Hence, one reason why rubber cartels don’t often succeed is because prices are also determined by underlying demand which in turn depends on global GDP growth. Although price stability is a desirable aim for any commodity including crude oil, edible commodities and plantation crops, in a recessionary phase there is no harm even if raw material prices remain lower in order for production to pick up momentum, if it finally leads to increased aggregate demand.
Thailand, Indonesia and Malaysia produced around 7 million tons of rubber last year. In ther first five months of 2009 they have already reduced output by more than 400,000 tons. Exports were cut by 540,000 tons in January to May, compared with a 414,000 ton reduction planned for the first half. El Nino is also showing signs of impacting rubber production in Malaysia and Indonesia as rains will be delayed.
Therefore, a combination of natural and supply-side interventions will keep rubber prices at stable or may be even higher levels in the coming months. But the moot question is whether the cartel has any justification to jack up prices since rubber has often provided reasonable returns to growers in the past twenty years thanks to new clones and productivity increases.
Monday, August 10, 2009
Shrinking stocks to lift rubber prices
Malaysian rubber prices are expected to remain stronger on falling stocks and lower production.
Investors are also optimistic about the commodity's price as demand for oil-based synthetic rubber would be affected due to the higher crude oil price which is above US$70 per barrel range.
Japanese stocks rose as an unexpected drop in the U.S. unemployment rate and a more-than- estimated gain in Japan’s machinery orders adding to evidence the global economy is recovering. The U.S. is the world’s engine of consumer spending and investors see the improvement in its labor market as a chance to buy Japanese shares, which are sensitive to the global economic cycle.
Indonesia’s economy probably grew at close to the fastest pace in Southeast Asia as higher commodity prices boosted rural incomes and a strife-free presidential election buoyed consumer spending and investment.
Investors are also optimistic about the commodity's price as demand for oil-based synthetic rubber would be affected due to the higher crude oil price which is above US$70 per barrel range.
Japanese stocks rose as an unexpected drop in the U.S. unemployment rate and a more-than- estimated gain in Japan’s machinery orders adding to evidence the global economy is recovering. The U.S. is the world’s engine of consumer spending and investors see the improvement in its labor market as a chance to buy Japanese shares, which are sensitive to the global economic cycle.
Indonesia’s economy probably grew at close to the fastest pace in Southeast Asia as higher commodity prices boosted rural incomes and a strife-free presidential election buoyed consumer spending and investment.
Friday, August 7, 2009
Natural rubber hits a month's high
The domestic rubber market has seen a sudden rise in price due to heavy offtake by China, world’s largest consumer of natural rubber (NR). The price reached Rs 101 a kg, the highest in a month.
The gap between domestic and international prices is narrowing day by day. Almost a month ago, the Indian price tag was higher by around Rs 17 a kg which paved the way for more imports.
According to leading Kochi-based dealers, the market would be dearer for a short while as the production season was on the anvil. The season would commence by the middle of September and around 45 per cent of the total annual production takes place during October-December. Unless there is a sustained growth in demand in countries such as China, US, India, Japan and Korea, the bull phase might fizzle out by next month.
Global shortfall puts rubber on a firm wicket
Rubber Headed for First Loss in Five Weeks
Rubber dropped as much as 2.5 percent, headed for its first decline in five weeks, on speculation a U.S. jobs report may revive concern that worsening unemployment will curb consumer spending and cap demand for the commodity.
Futures in Tokyo declined for a second day in three, retreating further from a nine-month high reached Aug. 4.
Italian tyre maker Pirelli & C (PECI.MI) said on Thursday its sales in China rose 40 percent in the first half from a year earlier, but weak global demand has put a planned $100 million investment in the country on hold.Despite bullish sales in China, demand in the United States and Europe had dropped sharply, a clearer picture would appear by the end of this year.
Tuesday, August 4, 2009
Rubber Advances to Highest in Almost Nine Months as Oil Gains
Rubber climbed to the highest since November, gaining for a third day, as crude oil advanced amid renewed optimism that a global economic recovery will increase demand for the commodity used to make tires.
Futures advanced as much as 2.3 percent as crude rose to a one-month high, boosting natural rubber’s appeal against its synthetic rival. Nouriel Roubini, an economist who predicted the financial crisis, said today that commodities may extend gains next year as the global recession abated.
Manufacturing in China climbed for a fifth month in July, CLSA Asia-Pacific Markets said today in an e-mailed statement. The CLSA China Purchasing Managers’ Index rose to a seasonally adjusted 52.8, the highest level in a year, from 51.8 in June.
The Dollar Index, which tracks the dollar against the currencies of six major U.S. trading partners including the euro, was at 78.414 at 3:59 p.m. in Singapore from 78.347 on July 31. It earlier touched 78.049, the lowest since Dec. 18.
Rubber advanced for a fourth day after U.S. auto sales posted their best month this year, raising optimism the industry’s worst drop in three decades may be ending.
Prices in Tokyo for the commodity used in tires gained as much as 3.4 percent after the month’s annual sales pace was 11.2 million, according to data yesterday from Autodata Corp. Today’s rise pushed rubber to the highest since Nov. 5, with a 47 percent advance this year.
“Improvement in the U.S. and Japanese auto sales raised optimism rubber demand will increase,” Kazuhiko Saito, chief analyst at Tokyo-based commodity broker Fujitomi Co., said today in a telephone interview.
January-delivery rubber gained as much as 6.6 yen to 202.9 yen a kilogram ($2,126 a metric ton) before trading at 200 yen on the Tokyo Commodity Exchange at 10:54 a.m. local time.
China’s passenger-vehicle sales rose 48 percent in June, the biggest jump since February 2006, as tax cuts and government subsidies helped the nation extend its lead over the U.S. as the world’s largest auto market this year.
Chinese motorists bought 872,900 cars, sport-utility vehicles and other passenger vehicles last month, the China Association of Automobile Manufacturers said on July 9. Overall vehicle sales, which include buses and trucks, rose 36 percent to 1.14 million.
Futures advanced as much as 2.3 percent as crude rose to a one-month high, boosting natural rubber’s appeal against its synthetic rival. Nouriel Roubini, an economist who predicted the financial crisis, said today that commodities may extend gains next year as the global recession abated.
Manufacturing in China climbed for a fifth month in July, CLSA Asia-Pacific Markets said today in an e-mailed statement. The CLSA China Purchasing Managers’ Index rose to a seasonally adjusted 52.8, the highest level in a year, from 51.8 in June.
The Dollar Index, which tracks the dollar against the currencies of six major U.S. trading partners including the euro, was at 78.414 at 3:59 p.m. in Singapore from 78.347 on July 31. It earlier touched 78.049, the lowest since Dec. 18.
Rubber advanced for a fourth day after U.S. auto sales posted their best month this year, raising optimism the industry’s worst drop in three decades may be ending.
Prices in Tokyo for the commodity used in tires gained as much as 3.4 percent after the month’s annual sales pace was 11.2 million, according to data yesterday from Autodata Corp. Today’s rise pushed rubber to the highest since Nov. 5, with a 47 percent advance this year.
“Improvement in the U.S. and Japanese auto sales raised optimism rubber demand will increase,” Kazuhiko Saito, chief analyst at Tokyo-based commodity broker Fujitomi Co., said today in a telephone interview.
January-delivery rubber gained as much as 6.6 yen to 202.9 yen a kilogram ($2,126 a metric ton) before trading at 200 yen on the Tokyo Commodity Exchange at 10:54 a.m. local time.
China’s passenger-vehicle sales rose 48 percent in June, the biggest jump since February 2006, as tax cuts and government subsidies helped the nation extend its lead over the U.S. as the world’s largest auto market this year.
Chinese motorists bought 872,900 cars, sport-utility vehicles and other passenger vehicles last month, the China Association of Automobile Manufacturers said on July 9. Overall vehicle sales, which include buses and trucks, rose 36 percent to 1.14 million.
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