MUMBAI – Rubber contracts on the Indian Commodity Exchange ended in the red today due to absence of demand from tyre makers and major bulk buyers, traders said.
The most active May contract of rubber on ICEX ended at 11,173 rupees per 100 kg, down 0.5%.
Sluggish demand from domestic stockists further weighed on rubber contracts on ICEX, said Joy Alencherry, the owner of Maria Rubber Links based in Kottayam, Kerala.
The overall sentiment remains bearish due to the extension of the nationwide lockdown till May 31. There is no conviction in recovery as near-term demand outlook remains grim due to lockdown, analysts said.
Confirmed cases of COVID-19 in India have crossed 100,000 and the death toll has risen to 3,163.
"The extension of the lockdown is negative for natural rubber market, which is already hit by recession in the auto sector due to first phase of lockdown," said Akshay Agarwal of Acumen Capital.
However, a rise in benchmark rubber contracts on the Tokyo Commodity Exchange prevented a sharp fall on the domestic bourse.
Today, the most active October rubber contract on the Japanese bourse ended up 1.5% at 153.7 yen (about 107.9 rupees) per kg, tracking key contract on Shanghai Futures Exchange.
However, the rise was capped on TOCOM, as fear of a second wave of coronavirus infections in China is likely to hit demand for the commodity, analysts said.
Global demand for rubber is seen at 13.01 mln tn in 2020, down over 5% on year. The demand for natural rubber from the automobile sector, especially from tyre manufacturers, has slumped due to lockdowns triggered by COVID-19, said the Association of Natural Rubber Producing Countries.
The price of the RSS-3 variety in Thailand rose by 31 cents to $138.90 per 100 kg, data from Rubber Board showed. In Malaysia, the price of the SMR-20 variety was at $111.05 per 100 kg, up $1.55.
Source Cogencis