Industry Update

Tire swing

High rubber prices to continue in 2011 as well

Domestic as well global rubber prices rallied to fresh historical highs due to heavy rainfall in top natural rubber producing areas of Southeast Asia like Thailand and India which may hit output for current year. Prices have also been supported by healthy demand from tyre industry and strong imports in China .

Indian rubber supplies peak October-January, but this year unseasonal rains have been hindering tapping.

Rubber RSS-4 prices at Kochi market rose to fresh record of Rs 20,700 per quintal on Friday against Rs 16,200, three-months back and Rs 13,500 at the start of 2010. In the last two years natural rubber prices at Kochi have risen by 300% from Rs 69-70 per kg in January 2009 to record high Rs 207 per kg now. Such type of volatility was last seen in 1994-1998 when price rose from almost Rs 2,500 per quintal to near Rs 6,000 within two years and again fell sharply towards Rs 2,700 level in 1998. (read more)

Rubber Advances to Near Record as Buyers Lured by Yesterday’s Price Tumble

Rubber climbed to near a record on speculation that a price slump yesterday may lure buyers amid lingering worries over tight supply. The cash price remained at an all-time high.

The June-delivery contract advanced as much as 1.1 percent to 412.2 yen per kilogram ($5,010 a metric ton) on the Tokyo Commodity Exchange and settled at 411.1 yen. The price tumbled 2.4 percent yesterday, the biggest drop since Nov. 24. The most- active contract climbed to a record 419.3 yen on Dec. 27. (read more)

Increasing Tire Production Likely To Keep Demand for Rubber High

Few tread on the subject, but it is strange how one of mankind’s earliest and most important inventions, the wheel, has come to depend on the congealed sap of a tropical tree to be really useful. Furthermore, while synthetic rubber has been around for the better part of a century, it does not compare to the natural latex in terms of durability and heat resistance; you would not want to land in an airplane equipped with synthetic rubber tires.

As a tropical tree, rubber’s zone of production is confined to its native areas in South America and primarily to the colonial plantations established in what are now Malaysia and Indonesia. You might think this confined geography coupled with an ever-increasing global population of tires would lead to surging prices for smoked rubber sheets. Not so: Even after a substantial bounce to nominal record prices for rubber, the average annual increase in constant-dollar terms since 1947 has been 0.64%. (read more)

G-lovely growth

Rubber glove exports are due to grow 23 per cent to RM8.8 billion this year, said The Malaysian Rubber Glove Manufacturers Association (Margma). 

For the last 15 years, Malaysia has been the world’s top supplier of rubber gloves. Last year, the country exported close to 100 billion pieces of rubber gloves to more than 180 countries.

This volume makes up two-thirds of the global market for rubber gloves. Healthcare products like medical gloves continue to see strong demand despite the current lacklustre global economic growth. (read more)

Rubber Futures Advance to Record as U.S. Production Raises Demand Outlook

Rubber futures extended a rally to a record after data showed manufacturing in the U.S. expanded at the fastest pace in seven months, raising concern that increased demand will worsen a supply shortage. The Thai cash price also climbed to an all-time high.

June-delivery rubber surged to as high as 427 yen per kilogram ($5,194 a metric ton) on the Tokyo Commodity Exchange in after-hours trading. Trading in this session will be settled on Wednesday. The most-active contract extended last year’s advance of 50 percent. (read more)

Oil prices rebound back over $90 a barrel

Oil prices rebounded from early losses Wednesday following more positive economic news and a government report that showed crude oil supplies shrank last week.

After falling as low as $88.10 a barrel, benchmark oil reversed course at midday and rose 93 cents from Monday’s settlement price to $90.31 a barrel on the New York Mercantile Exchange. (read more)

OIL FUTURES: Crude Turns Higher As Equities Gain

NEW YORK (Dow Jones)–Oil prices rose Wednesday, reversing course midday, as equities markets turned higher.

Light, sweet crude for February delivery rose 52 cents, or 0.6%, at $89.91 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange added $1.37, or 1.4%, at $94.90 41 cents, or 0.4%, at $93.12 a barrel.

Crude began the day lower and continued to sink through mid-morning in New York following a U.S. government’s report showing fuel inventories rose more than expected last week. Nymex crude hit an intraday low of $88.10 before rallying above $90 a barrel on the back of a stock market rally. (read more)

Saudi Aramco Cuts Most February Oil Prices, Increases Super Light to Asia

Saudi Aramco, the world’s largest state-owned oil company, cut official prices for its crude for customers in the U.S., Europe and the Mediterranean next month and raised prices on some light grades to Asia.The formula price for Arab Super Light crude, a grade sold only in Asia, rose the most, climbing $1.15 a barrel to $6.40 above the average of Oman and Dubai grades, the Gulf benchmarks used by traders in Asia, the company said in an e-mail today. (read more)

Oil futures pare drop after ADP offers upbeat data

NEW YORK (MarketWatch) — Oil futures on Wednesday extended their largest slide in seven weeks as the dollar climbed, denting the appeal of dollar-denominated commodities. Oil prices lessened their losses, however, after the payrolls processor ADP reported the private sector added 297,000 jobs in December, nearly three times the number expected. (read more)

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