By Rahul Dhuri
MUMBAI – The most-active December contract of rubber hit a three-month low of 11,751 rupees per 100 kg on Indian Commodity Exchange, tracking a fall in prices of natural rubber in the key spot markets of Kerala, traders said.
The December contract settled at 11,771 rupees per 100 kg, down 1.3% from Tuesday.
Rubber prices in the spot markets of Kerala fell further today due to low demand from tyre companies. The demand from tyre companies was low as they bought rubber in huge quantity when supply was very tight during the monsoon, traders said.
In Kochi and Kottayam, the widely-traded RSS-4 variety of rubber was sold at 118 rupees per kg today, down by 1-2 rupees from Tuesday.
According to data from the Rubber Board of India, the RSS-4 variety was sold at 119.00 rupees per kg in both Kochi and Kottayam, down 1.00 rupee from the previous close.
Initiala weakness in rubber contracts on the Tokyo Commodity Exchange also weighed on the domestic bourse, said Joy Alencherry, the owner of Maria Rubber Links in Kottayam.
Futures contracts of rubber on the TOCOM hit an over two-year low of 151.0 yen (95.20 rupees) per kg today tracking a fall in crude oil prices on New York Mercantile Exchange Tuesday, analysts said.
Crude oil prices fell due to concern over global economic slowdown, which led to a fall in Asian equities, weighed on market sentiment. Rubber prices take cues from crude oil as it is used to produce synthetic rubber, a substitute for natural rubber.
Weakness in the benchmark contract of rubber on the Shanghai Futures Exchange also weighed on prices.
However, the rubber contract on TOCOM ended up 0.9% at 154.4 yen due to weak yen against dollar and short covering by market participants after it hit an over two-year low in the early trade.
A weak Japanese currency makes yen-denominated rubber cheaper for overseas buyers.
In Thailand, the price of RSS-3 grade rubber was down 66 cents at $134.11 per 100 kg, while in Malaysia, the SMR-20 grade was down $2.35 at $120.25 per 100 kg, according to the Rubber Board.
Today’s closing prices of rubber, in rupees per kg, at Kottayam and Kochi, as detailed by the Rubber Board, and the change in prices, in rupees, compared with the previous close are given in the following table:
|RSS-5||114.00||(-) 0.50||114.00||(-) 0.50|
Subdued demand from domestic stockists and tyre manufacturers is likely to keep prices of natural rubber under pressure in key spot markets of Kerala in the coming days, traders said.
Higher imports of the commodity is also creating bearishness in the market, they said. End
US$1 = 71.45 rupees
Edited by Akul Nishant Akhoury