Daily report on Natural Rubber: Feb 24, 2012

 ♦ While broad trend remained weak, RSS4 in the spot market remained firm on Thursday while in futures market, it ended around one per cent up after an initial fall.

♦ Muted demand from the major rubber consuming industries, higher imports, concerns over economic growth and slowing car sales have been putting downward pressure amid higher stock estimates and consistent rise in natural rubber production. However, rise in natural rubber prices in the international markets and the ongoing lean production period is expected to provide firm support. Earlier quotes prevailing in the Indian markets used to be on a premium to that in other major market like Bangkok (RSS3) or Malaysia (SMR20). However, since late January this difference has been narrowing down and presently Indian RSS4 is on a discount to Bangkok RSS3.

♦ In the global markets, natural rubber prices resumed its uptrend on Friday after a brief pause. Tocom rubber futures hit a fresh five month high, heading to post its best in five weeks supported by rally in crude oil and ongoing lean tapping season in top natural rubber producing country.

♦ The near month February futures in Tocom expired yesterday with 276 lots delivered against 200lots the previous month. The new benchmark August contract was introduced today.

♦ Reliance Industries and Russia’s Sibur to jointly set up butyl rubber plant with an installed annual capacity of one lakh tonnes in Jamnagar, India.

♦ Thai rubber intervention scheme delayed to March due to legislative processes (Reuters).

♦ Indian natural rubber imports soared in January, rising 223 per cent to 26375 tonnes according to latest statistics Rubber Board. Natural rubber production in January was at 102500 tonnes (up 3.7 per cent on YoY basis) while consumption was at 82000 tonnes. However, Rubber Board expects natural rubber production to fall steeply in February and March.

Analyst: Anu V Pai

Source: Geojit Comtrade