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Saturday, January 15, 2022

India Rubber: Settles lower on ICEX on short selling post 13-wk high

By Rahul Dhuri

MUMBAI – The most active January contract of rubber on Indian Commodity Exchange, settled lower because investors added short positions after prices hit a 13-week high of 12,948 rupees per 100 kg, on Monday, traders said.

On ICEX, the January contract settled at 12,772 rupees per 100 kg, down 1% from Monday.

A 18-tn rise in open interest in the contract to 627 tn indicated short selling.

However, gains in prices of natural rubber in the key spot markets of Kerala, cushioned the fall in domestic contracts, said C.J. Augustine, a rubber trader based in Idukki.

Today, in the spot key markets of Kochi and Kottayam, the widely-traded RSS-4 variety of rubber was sold at 123-125 rupees per kg today, up 1-2 rupees from Monday, traders said.

“Rubber prices are likely to rise by 2-3 rupees from its current level on expectations of a fall in output and pickup in demand from tyre manufacturers,” said Joy Alencherry, owner of Maria Rubber Links in Kottayam.

India’s natural rubber production is likely to be lower than expected as heavy rainfall and floods in Kerala hit output, traders said.

The state accounts for over 80% of India’s natural rubber output.

Availability of rubber is still weak despite it being the peak season (Oct-Dec), said Narendranath Dharmaraj, wholetime director of Harrisons Malayalam Ltd.

As per data from the Rubber Board, Apr-Oct natural rubber output was at 344,000 tn as compared to 382,000 tn in the same period a year ago.

The RSS-4 variety in Kochi was sold at 123.50 rupees per kg, and Kottayam was sold at 124.00 rupees per kg, both unchanged from Monday, according to Rubber Board data.

Meanwhile, futures contracts of rubber traded almost flat on the Tokyo Commodity Exchange today as weakness due to a firm yen against the US dollar was offset by gains in prices of rubber on Shanghai Futures Exchange, analysts said.

A strong Japanese currency makes the yen-denominated commodity costlier for overseas buyers.

The most-active May rubber contract ended at 171.3 yen (107.48 rupees) per kg, down 0.2% from the previous close.

Profit booking by investors after prices hit a two-month high of 173.0 yen per kg earlier today may keep rubber prices in check.

    In Thailand, the RSS-3 grade rubber was up by 59 cents at $146.12 per 100 kg and in Malaysia, the SMR-20 grade was up 85 cents at $127.75 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-4 124.00  Unch 123.50  Unch
RSS-5 120.00  1.00 120.00           1.00
ISNR-20 114.50 0.50 NA       NA
Latex 90.90 2.15 NA       NA


Prices of natural rubber in key spot markets of Kerala are likely to rise in the coming week due to concerns over fall in domestic output, coupled with improved demand from domestic stockists, market participants said.

Rubber prices are likely to rise by 2-3 rupees from its current level, they said. End

US$1 = 70.44 rupees

Edited by Maheswaran Parameswaran

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