Latex on a slide even as rubber futures recover

Aravindan Kottayam | Updated on July 03, 2020 Published on July 03, 2020

Spot rubber finished firm following a sharp recovery in domestic futures on Friday. RSS-4 improved to ₹119 (118) per kg, according to traders and the Rubber Board. The grade was quoted marginally higher at ₹115 (114) by dealers. The trend continued to remain mixed as latex weakened further on dull demand.

The worst is almost over as far as the world consumption of NR is concerned, according to the Association of Natural Rubber Producing Countries (ANRPC). The world consumption is now set to enter the positive territory by increasing 1.4 per cent, year-on-year, during Q3 2020 (July-September). More specifically, the NR market has almost come out of the concerns over the abnormal fall in demand.

While conditions have finally turned favourable for NR to gain strength and return to the level it ruled during first half of January, it is important to account the associated risks as well. The concern over the possibility of Covid-19 taking a second wave, delay in implementing effective stimulus policies by governments, and increasing geopolitical conflicts can hinder the above favourable factors from getting translated into positive market sentiment.

In futures, the July contracts flared up to ₹123.01 (119.94) and August to ₹125.92 (122.77) a kg on the Indian Commodity Exchange (ICEX). The July contracts were up by 2.56 per cent with a volume of 64 lots and total trade value of ₹78.02 lakh.

RSS-3 (spot) inched up to ₹115.56 (115.53) per kg at Bangkok. Its July futures closed at ₹98.62 (98.87) and August at ₹100.36 (100.33) on the Tokyo Commodity Exchange. SMR 20 improved to ₹88.69 (87.84), while Latex 60% declined to ₹85.92 (86.32) at Kuala Lumpur.

Spot rubber rates (₹/kg): RSS-4:119 (118); RSS-5: 115.50 (115); ISNR 20: 103 (103) and Latex (60% drc): 82 (82.50).

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Published on July 03, 2020
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