Marginal fall in NR price against limited buying
WEEKLY RUBBER MARKET REVIEW
The Indian NR market marginally moved down in the week 7-11 May 2012. Copious summer showers in the main rubber growing regions have brightened the prospects for resumption of rubber tapping in several plantations and most of the consumers limited purchases to bare minimum, anticipating further fall in price in the short term. Buying was mainly from the general rubber goods sector.
Most of the quantity buyers were content with modest purchases. Futures trading in the National Multi Commodity Exchange also lacked momentum. Price of RSS 4 fluctuated around Rs.191 a kg for near term May delivery.
Prices of dry grades declined a bit in the spot market despite modest arrivals. While sheet rubber RSS 4 fluctuated around Rs.194 a kg, block rubber ISNR 20 followed closely with Rs.193.50 a kg. Generally when the market arrivals decline, difference in price between these two grades narrows down. However, latex 60% remained steady at Rs.125.25 a kg in a stable demand situation.
Price of NR in the international market also declined during the week. In the trend setting Tokyo Commodity Exchange futures quotations slipped intra week to a five-month low of 289.6 yen for RSS 3 for October delivery, though the price firmed up to 293.8 yen ($ 3.69) later. In the Shanghai Commodity Exchange the grade was traded at 26 yuan ($ 4.2) a kg. Concern over the Euro zone debt crisis worsening after the general elections in a few countries in the European Union and weak monthly employment data from the US eroded the market momentum. In addition, report about NR inventories in Japan rising to a 5-year high close to 15,000 tonnes also put the price under pressure.
Physical trade in the Bangkok market was limited to three days in the week on account of holidays, when RSS 3 declined from $ 3.86 to $ 3.80 a kg. At the same time block rubber SMR 20 moved down from $ 3.6 to $ 3.55 a kg. The Indonesian SIR 20 was almost steady around $ 3.52 a kg, backed by steady buying from China. Latex 60% slid from $ 2.45 to 2.38 a kg during the week in the Kuala Lumpur market.