Industry Update

oilRubber theft on the rise again

IT seems that the hijacking of rubber latex-filled tankers and the theft of SMR grade rubber are on the rise again.

This “hot” issue was highlighted during the Malaysian Rubber Board (MRB) dialogue session last Thursday between Plantation Industries and Commodities Minister Tan Sri Bernard Dompok and local rubber industry representatives.

With both latex and SMR 20 rubber currently trading at record prices of about RM10 and RM15 per kg respectively, the black market for rubber has become equally lucrative as palm oil, the other major commodity frequently hijacked on the highways and trunk roads nationwide. The hijackings of latex concentrate and SMR rubber ready for export are most prevalent in periods of high prices, as was seen in 2006 and 2008. It appeared to be happening again now, said MRB director-general Datuk Dr Salmiah Ahmad. (continued)

Latex to Plummet as Weather Improves, Biggest Glove Maker Says

Jan. 12 (Bloomberg) — Rubber latex may slump in 2011 as flooding and heavy rains abate, allowing production to rebound across Asia, according to Malaysia’s Top Glove Bhd., the world’s biggest rubber-glove maker.

A spike in the price of latex isn’t sustainable, Managing Director Lee Kim Meow said in an interview today. So-called wet latex, a grade used by glove makers that contains 60 percent latex, may fall to 5 ringgit ($1.60) a kilogram within six months from almost 10 ringgit at present, Lee forecast by phone.

Rubber futures in Tokyo surged to a record today, extending last year’s 50 percent rally, as La Nina rains cut output in top producers including Thailand, while demand led by India and China increases. The contract has risen as much as 8.6 percent this year, beating the returns of all the members of the S&P GSCI Commodity Index, including gas oil, cotton and Brent crude. (continued)

Another bullish week ahead for rubber market

KUALA LUMPUR: The Malaysian rubber market is set to ride another bullish week with prices continuing to remain at a high level on concerns over the tight supply conditions globally.

The tyre-grade SMR 20 last Friday hit 1,600 sen per kg, the highest level ever since it was introduced in 1972, as Singapore and China car makers continued to place orders despite higher prices.

“Even with the current high prices, traders are still buying, due to improved car sales. This scenario will lead to even higher prices at a time when supply has remained thin, especially, with the onset of the wintering season,” the dealer highlighted. (continued)

Top Glove to invest RM160mil in Cambodian rubber plantation

KUALA LUMPUR: Top Glove Corp Bhd, the world’s largest rubber glove manufacturer, is investing RM160mil in Cambodia to plant rubber trees to reduce its dependency on latex which is bought at market prices.

Chairman Tan Sri Lim Wee Chai said the company was targetting to obtain 20% of its latex requirement from the plantation over time.

“We have about 8,000 ha of net plantable land for rubber trees,” he said at a briefing for analysts and reporters on Top Glove’s first quarter results ended Nov 30, 2010 here yesterday. (continued)

Stimulant abuse kills off latex flow

THE high rubber price has prompted many smallholders to tap as much latex as possible from their rubber trees. Some smallholders have been using stimulants to get more latex from each tapping.

But those who are not educated on when and how to use such stimulants properly have found portions of their rubber tree bark dry up and not yielding latex any more.

Greenyield Bhd executive director Dr S. Sivakumaran, based in Selangor, said stimulants should only be prescribed by those who were properly trained. (continued)

Smallholders gain but processors suffer from higher rubber prices

KUALA LUMPUR: While the record high rubber prices augur well for smallholders, local rubber manufacturers and processors are pressured by the increasing cost of natural rubber (NR), said Plantation Industries and Commodities Minister Tan Sri Bernard Dompok.

To minimise the impact of high cost of raw material on downstream operators, he said the Government would be looking at several steps to help stabilise rubber prices.

Tyre-grade SMR 20 is currently traded at about RM15.76 per kg while Latex-in-Bulk about RM10 per kg. (continued)

OIL FUTURES: Nymex Crude Falls On Alaska Pipeline Restart

NEW YORK (Dow Jones)–Crude futures traded lower Tuesday after the restart of a major pipeline supplying the U.S. West Coast, reducing concerns about supply disruptions in the world’s largest oil consumer.

Light, sweet crude for February delivery recently traded 90 cents, or 1%, lower at $90.64 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 76 cents lower at $96.67 a barrel.

On Monday, workers restarted the flow of oil through the 800-mile Trans Alaska Pipeline after crews installed a new section of pipe to bypass a damaged segment. A leak discovered earlier this month had forced producers on Alaska’s North Slope to cut production by 95% during four days when the pipeline was completely shut. (continued)

IEA raises oil demand forecast

The International Energy Agency on Tuesday raised its forecast for world oil demand for 2011.

The Paris-based agency predicted demand will rise to 89.1 million barrels a day, up from 87.7 million in 2010.

The IEA based the change on recharged global economic growth and a cold winter in the Northern Hemisphere that is leading to more consumption of heating oil. 

Last month, the IEA forecast 2011 oil demand would hit 88.8 million barrels a day. (continued)
Oil struggles to be in the black, trades near $92

SAN FRANCISCO (MarketWatch) — Crude-oil futures wavered between small gains and losses Tuesday, helped by a weaker dollar and a general upward mood for commodities. Crude for February delivery most recently declined 3 cents to $91.53 a barrel on the New York Mercantile Exchange. (continued)
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