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India Rubber: Ends tad down on ICEX on fresh selling post 8-mo high

Friday, May 24

 

By Rahul Dhuri

 

MUMBAI – Rubber futures on Indian Commodity Exchange ended marginally lower as investors added short positions after prices hit an eight-month high of 14,752 rupees per 100 kg earlier today, analysts said.

 

The most-active June contract of rubber ended down 0.1% at 14,521 rupees per 100 kg. A 123-tn rise in the open interest to 708 tn indicated short selling.

 

However, a rise in the prices of natural rubber in key spot markets of Kerala, and gains in the benchmark contracts on Tokyo Commodity Exchange cushioned the fall on ICEX, traders said.

 

Today, prices of natural rubber in key spot markets of Kerala rose to a near two-year high due to firm demand from domestic stockists amid the ongoing supply crunch, traders said.

 

Supply of rubber has fallen in the market as its tapping is usually low during the summer, traders said. The tight supply is likely to continue for at least a month and most traders are selling old stock due lack of fresh arrivals, they said.

 

In Kochi and Kottayam, the widely traded RSS-4 variety of rubber was sold at 141-144 rupees per kg, up 2-3 rupees from Thursday, traders said. Rubber Board data showed that the RSS-4 variety was traded at 142.50 rupees per kg, up 1 rupee, in both the markets.

 

A pick-up in demand from tyre manufacturers is also seen supporting prices. "Tyre companies are willing to pay higher prices for rubber, but there are hardly any sellers due to lower availability of the commodity," said Biju Thomas, a Kerala-based rubber trader.

 

In the global arena, rubber contracts on TOCOM settled higher due to a fall in global production and in line with crude oil contracts on New York Mercantile Exchange, analysts said. Rubber prices take cues from those of crude oil as the latter is used to produce synthetic rubber, a substitute for natural rubber. 

 

The most-active October natural rubber contract on the Japanese bourse ended at 192.5 yen (around 122.05 rupees) per kg, up 0.3% from the previous close.

 

Global production of natural rubber fell 5.2% on year to 2.99 mln tn in Jan-Mar, while consumption during the period was down marginally at 3.38 mln tn, according to a release by the Association of Natural Rubber Producing Countries.

  

In Thailand, price of the RSS-3 variety was marginally up by 1 cent to $181.70 per 100 kg, while in Malaysia, the SMR-20 variety was up $1.13 at $153.90 per 100 kg, according to Rubber Board data.

 

The following table shows today's closing prices of rubber, in rupees per kg, as detailed by the Rubber Board, and the change in prices, in rupees, compared with the previous close:

 

 KOTTAYAMKOCHI
GRADEPRICECHANGEPRICECHANGE
RSS-4142.501.00142.501.00
RSS-5139.00

1.00

139.001.00
ISNR-20129.00UnchNA     NA
Latex96.150.50NA     NA

 

OUTLOOK

In the coming days, the price of natural rubber in key markets of Kerala is likely to extend gains due to robust demand from stockists amid the ongoing supply crunch in the market, traders said.  End

 

US$1 = 69.53 rupees

 

Edited by Mainak Moitra

 

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