Global Natural Rubber prices drops on lower demand

TOKYO (Commodity Online): Natural rubber prices in Indian as well as in global market dropped on lower demand in the major consuming nations like India, China.

In National Multi Commodity Exchange (NMCE), for October delivery, rubber traded down at Rs 17911 per ton and in Tokyo Commodity Exchange (TOCOM), the commodity for November delivery traded down 2.1 yen to 235.5 yen per Kg on Tuesday.

According to Centre for Monitoring Indian Economy (CMIE), natural rubber consumption, which rose to a 72-month high of 334664 tons in January 2011 has seen a sharp slump since then.

The main reason for the drop in rubber consumption is due to decline in demand for the commodity in tyre industry in the country. Since April 2011, the demand for rubber in the tyre industry in the country has been flat to negative (except for September).

India’s natural rubber imports are likely to drop by 27 percent to 150,000 tonnes in the current year to end-March 2013

While in China, car sales in China from January to May this year grew just 3.2% compared to two previous two years, reflecting the slowdown in the country.

According to Hong Kong Shanghai Banking Corporation (HSBC) Flash Purchasing Managers Index, China’s industrial activity fell to a seven-month low of 48.1 in June from 48.4 in May.

In addition to all above, According to International Rubber Study Group, global rubber production is expected to be 7.8% higher to 11.8 million tonne in 2012. all these factors weigh heavily over the price of the commodity.

Rubber for July delivery, in TOCOM, traded down 5.2 yen to 233.8 per kg and in NMCE, the price of the commodity dropped to Rs 18408 per ton on 26th June at 12:45 IST.

Source: http://www.commodityonline.com/news/global-natural-rubber-prices-drops-on-lower-demand-48744-3-48745.html