Rubber prices falling

cse.alpha · 1 Rubber prices falling Mon Mar 14, 2011 8:53 am

cse.alpha

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Rubber prices falling

Top grade rubber crepe prices in Sri Lanka fell to Rs 545 per kg last week - down from high of Rs 700 per kg a month ago.

Rubber futures in Japan have fallen to 384 yen per kg on 14th March 2011 - down from high of 535 yen just a month ago.

Prices in Japan are falling due to increased concerns of demand weakening after earthquake and tsunami disasters in Japan, and rising oil prices hurting car sales in China.

Thailand rubber prices have also dropped similarly recently.

This should serve as a reminder to investors of volatility and unpredictability of commodity prices - companies that depend on commodities should not trade at premium valuations.

Investors in plantations with high exposure to rubber (e.g. AGAL, HOPL, KGAL, KOTA, KVAL, MAL, NAMU etc) and even new IPO of Free Lanka Capital (which has large exposure to rubber) should analyse impact of falling rubber prices carefully before investing, remembering that wage hike will also happen from April 2011.

Rajitha · 2 Re: Rubber prices falling Mon Mar 14, 2011 9:00 am

Rajitha

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How is this that unpredictable ? IF you lived under a rock it might have lol!

The Rs 700 were about Rs 150 over the last quarter high! Even with that and heavy rains Rubber plantations still did amazingly. Just imagine how great earnings they will produce this quarter. This is getting the rubber prices back towards the last quarters all time high! Even if the rubber prices drop Rs 50-70 more its still a great price for them!
So what you saying is suddenly some product trading at rs 100 go up to about rs 150 and falls back to around rs 110 its a bad thing ? lol!

. IMO last quarter showed how great the rubber industry will be even amongst rising oil prices or not! As long as India + China do not stop giving those huge orders rubber prices would remain above competitive always!

Kaush · 3 Re: Rubber prices falling Mon Mar 14, 2011 9:15 am

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I think this situation will not continue and this is a temporary thing. Prices of rubber will rise again due to huge demand from vehicle manufacturing countries. We can expect a temporary decrease in prices of rubber due to Tsunami hit in Japan but I still believe that for long term investment rubber plantations are one of the best investment. Of course not for short term investment.

smallville · 4 Re: Rubber prices falling Mon Mar 14, 2011 9:54 am

smallville

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Prices would mostly get stabilised for awhile now.. it has gone up so high that we could not say it has to sustain at that level.. Planations were also benefitted from this and the results may come in this qtr as well.. but again those will not have any effect at all in my openion if this comes down to 500 even...

tubal · 5 Re: Rubber prices falling Tue Mar 15, 2011 6:44 am

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The Thai government is already talking about intervention to prop up rubber prices which have dropped by 50% from their peak.

http://www.futurespros.com/news/futures-news/update-2-thai-govt-to-support-domestic-rubber-prices-1000008959

The slide started before the tsunami

cse.alpha · 6 Re: Rubber prices falling Tue Mar 15, 2011 8:43 am

cse.alpha

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March 15 (Bloomberg) -- Rubber futures in Tokyo plunged 8 percent to 353.5 yen a kilogram at 9:04 a.m. local time.

The contract yesterday tumbled to the lowest level in more than four months after the worst earthquake on record in Japan caused power-supply disruptions, forcing carmakers to halt production, raising concern demand may slump.

dhamm · 7 Re: Rubber prices falling Tue Mar 15, 2011 9:48 pm

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cse.alpha wrote:March 15 (Bloomberg) -- Rubber futures in Tokyo plunged 8 percent to 353.5 yen a kilogram at 9:04 a.m. local time.

The contract yesterday tumbled to the lowest level in more than four months after the worst earthquake on record in Japan caused power-supply disruptions, forcing carmakers to halt production, raising concern demand may slump.

Eaerthquake/tsunami clearly having a short term impact. But who is going to think that China/India will stop whatever there productions which use rubber? Then again will Toyota and all other Japanese firms permanently stop their production bcz of the disaster??

Then why some ppl in the forum want to shout about rubber prices? Is it to educate other readers or to get some other advantage? Decision is up to the readers.