Latex Price

1 Rubber prices reach new highs by Hanim Adnan The Star On Line April 26 20102 Malaysia Top Glove can weather rising costs by By Soo Ai Peng Reuters April 143 Glovemakers fall on costs concern Business Times April 13 20104 Top Glove may raise prices if US$ falls latex cost rises by By Ooi Tee Ching Business

Times April 1 20105 Inflationary prices challenge hospital supply chain spending Healthcare Finance News

April 1 20106 Growth estimates optimistic says rubber body By fe Bureau Yahoo Finance India

March 24 20107 China tire sales to advance 10 -Sumitomo Rubber From Bloomberg March 15 20108 Rubber price hits all time high March 12 20109 PolymerLatex with significant price increase as of 1st April 2010 March 11 201010 Adventarsquos 1QFY10 net profit jumps 189 by Joy Lee The Edge March 03 201011 Bridgestone Europe increases its price Rubber World February 25 201012 Pirelli Tyre 4-6 Per Cent Price Increase In European Markets For Car Motorcycle And

Truck Tyres February 19 201013 High rubber prices could deflate tyre manufacturersrsquo profitability Livemintcom The Wall

Street Journal February 14 201014 Tyre maker Michelin on alert as rubber prices rise Reuters February 12 201015 World rubber supply tight but price outlook bullish by Bloomberg February 12 201016 Latex rubber price closes above 700 senkg for first time sine rsquo08 by Michael Prather

February 12 201017 Producers tap into demand for rubber as price soars by Kevin Brown in Rantau Malaysia

Financial Times February 2 201018 Natural rubber prices likely to remain high by Hanim Adnan The Star January 27 201019 Business Time Malaysia Strong demand to boost rubber prices January 23 201020 Rubber prices to rise further amid concern over supply New Sabah Times January 18

201021 Rubber glove prices may rise this year by David Tan January 18 201022 Natural rubber latex prices continue climb January 8 201023 Tyre Industry Needs 4 Price to Offset Natural Rubber Costs January 7 201024 Natural rubber prices on the march may surpass RM10 by Zaidi Isham Ismail Business

Time Malaysia January 5 2010

Natural Rubber Price Increase - Reference list - April 2010

Ansell is providing these articles for information purposes only

1 Rubber prices reach new highs by HANIM ADNAN The Star On Line April 26 2010

Rubber is one of the hottest commodities traded so far this year with price rallies seen in most international rubber exchanges Tyre-grade Standard Malaysian Rubber (SMR 20) has also been hitting new highs particularly in the past three months and currently trading above the RM10600 per tonne level According to Association of Natural Rubber Producing Countries (ANRPC) director-general Prof Djoko Said Damardjati tightness in rubber supply would remain an issue amid an upsurge in demand from China and India for their booming auto and tyre manufacturing industries ldquoSevere drought the current wintering season as well as active replanting activities in most major producing countries could affect rubber output ldquoEven the preliminary estimates from members of ANRPC indicate that the global rubber supply is unlikely to rise above 6 this yearrdquo he told StarBiz recently ANRPC had earlier estimate that global rubber production could reach 95 milllion tonnes this year up by about 63 from last yearrsquos 89 million tonnes Djoko also expected rubber supply to remain tight until 2011 A large extent of existing yielding trees in major producing countries were planted in 1980s ldquoMost of the trees planted have reached declining yield phase thus the age composition of the existing yielding area is unfavourable for yield improvementrdquo he added Djoko noted that Indonesia and Malaysia had undertaken active replanting activities since 2005 ldquoI believe rubber prices will remain firm for quite some time until supply recovers possibly by early 2012rdquo Apart from the buoyant demand and drought-ridden supply he said other factors influencing the rubber market included the weakening US dollar volatility in yen and the increasing crude oil prices Members of the ANRPC countries account for about 94 of the total world natural rubber production

Interestingly more than 45 of global consumption of natural rubber is in China India and Malaysia which are the major consuming countries in the ANRPC ANRPC in its latest report said imports from China during January to February surged 63 for natural rubber and 118 for compound rubber compared with the same period last year During the same period India posted a 17 increase in natural rubber consumption given the large-scale capacity in its auto tyre manufacturing operation Meanwhile Hwang DBS Vickers Research has also raised its 2010-2012 forecast rubber prices by 39 to 44 as its previous forecasts had not taken into account the price recovery on the back of stronger crude oil prices The brokerage said ldquoWe believe strong demand recovery for the automotive sector in China and supply constraint due to ongoing conversions to oil palm and the wintering season between February and April would contribute to the jump in rubber prices Our assumptions are factoring in 29 lower prices in the second half of 2010 compared with the first halfrdquo One analyst with a local stockbroking firm said the recent automobile industry statistics unveiled that the pick-up in the auto sector in China and the United States had been strong The automobile industry is the single biggest user of latex easily consuming about 70 of the world latex production While some might argue that the price upsurge could be short-term given the traditional low supply wintering season however many feel that the current price hike was a reflection of strong demand ldquoEven with a possible price reduction down the line natural rubber prices are unlikely to ease to the low levels of December 2008 and January 2009rdquo he added


2 Malaysia Top Glove can weather rising costs by By Soo Ai Peng Reuters April 14 2010

Malaysiarsquos Top Glove (TPGCKL) can overcome the impact of rising raw material costs and foreign exchange fluctuations by raising product prices according to a senior company official Top Glove the worldrsquos largest rubber glove maker by production capacity sees the recent sharp gains in rubber prices and the ringgit currency as short-term fluctuations and will pass through any impact to its customers said executive director Lim Cheong Guan ldquoAny impact will be short-term Gloves are a necessity in the medical industry any price increase is negligible to the end users compared with the total medical costrdquo Lim told Reuters via email Shares of rubber glove makers have suffered heavy selling pressure this week shedding as much as 8 percent in the past five trading days on concerns the sharp rise in rubber prices as well as the fast appreciation of the ringgit currency will eat into their profit margins Tokyo rubber futures this month hit a 20-month high on the back of strong oil prices and tight physical supply The ringgit MYR= is up about 7 percent year-to-date making it the best performing Asian currency A stronger ringgit will hurt glove makersrsquo profits as their products are sold in US dollar Malaysian rubber glove makers supply more than 60 percent of the worldrsquos rubber latex

gloves which have seen a spike in demand following the outbreak of the H1N1 flu in 2009 By 0335 GMT shares of Top Glove were down 14 percent Smaller rivals Supermax (SUPMKL) was up 15 percent and Kossan Rubber (KRIBKL) added 03 percent Apart from raising glove prices Top Glove can hedge against rising ringgit by sourcing latex concentrate from Thailand which is transacted in US dollar said Lim The price of latex from which gloves are made will likely come down in May when the current supply squeeze resulting from dry weather conditions eases he said Rubber supply in Thailand and Malaysia the worldrsquos biggest and third-biggest producers respectively has gradually declined since the dry season began in late February Lim also brushed off market worries that the rubber glove industry is adding too many new plants too fast Rubber glove makers have embarked on aggressive expansion plans in recent years to ride on growing demand prompting fears that supply may soon outstrip demand ldquoAdditional glove supply will come in gradually and if there is any oversupply manufacturers will revise its expansion plan in order not to affect the supply demand situationrdquo he said


3 Glovemakers fall on costs concern Business Times April 13 2010

Malaysian glovemakers led by Top Glove Corp declined in Kuala Lumpur trading on the prospect a surge in rubber prices and a higher ringgit will increase costs and lower the value of overseas earnings damping earnings Top Glove fell 44 per cent to RM1290 at the close its biggest retreat in almost a year About 21 per cent of the companyrsquos revenues in the year to Aug 31 were made outside Malaysia Supermax Corp which makes the majority of its sales in America slid 36 per cent to RM664 Rubber futures reached a 20-month high in Tokyo trading yesterday increasing the cost of latex used in medical and other protective gloves while the ringgit touched a 23-month high against the dollar A higher local currency

reduces the value of overseas sales when converted back into ringgit ldquoWith higher latex costs a weaker ringgit against the US dollar and potential pricier energy costs we see growing concern for earlier-than-expected margin compressionrdquo AmResearch said in a report on April 9 Investors are concerned that glove-makers wonrsquot be able to pass on all the increased costs to their customers it said AmResearch downgraded the sector to ldquounderweightrdquo on April 9 Top Glove was cut to ldquoholdrdquo with a lower fair value of RM1250 Kossan Rubber Industries Bhd was reduced to ldquoholdrdquo with its fair value trimmed to RM765 The stock lost 44 per cent to RM756 today

4 Top Glove may raise prices if US$ falls latex cost rises by By Ooi Tee Ching Business Times April 1 2010

TOP Glove Corp Bhd (7113) the worldrsquos largest glove maker will raise glove prices further to maintain its profit margins if the US dollar weakens and the cost of latex becomes more expensive It has been increasing its rubber glove prices over the past three months Four weeks ago latex price traded at a record price of RM746 per kg In the last few days it has been hovering around RM740 per kg In contrast the greenback has weakened against the ringgit since mid-2009 The US dollar yesterday closed at RM326 ldquoThe combination of these factors has led to higher glove prices Since the beginning of the year wersquove managed to pass on the cost increase to our clientsrdquo said chairman and managing director Tan Sri Lim Wee Chai ldquoWe need to protect our shareholdersrsquo interestrdquo he told reporters on the sidelines of Invest Malaysia 2010 in Kuala Lumpur yesterday Last year Top Glove posted its best annual net profit since 2001 and doubled its dividend payout to 22 sen a share

In the first half of its financial year ending August 2010 the group managed to achieve a 14 per cent net profit margin much better than the previous financial year Lim said the company is optimistic of delivering a profit margin of at least 14 per cent in view of rising global demand for gloves As the worldrsquos biggest glove maker capable of churning out 33 billion pieces and commanding 22 per cent of the global market share Top Gloversquos price move is closely watched by rivals glove makers Raising glove prices is an opportune move as currently global demand outweighs supply In previous years when supply was more than demand glove makers undercut each other by giving discounts Between 2006 and 2008 Top Glove made a gross profit margin of less than 10 per cent This year Top Glove has raised its dividend payout to 40 per cent of profits ldquoBased on the measures wersquove taken to protect our profit margin we should be able to give out more than last yearrsquos 22 sen a sharerdquo said Lim


5 Inflationary prices challenge hospital supply chain spending Healthcare Finance News April 1 2010

IRVING TX ndash Hospital inpatient and outpatient services encountered inflation rates around 8 percent in the past 12 months which is 2 percent higher than the previous year according to a new report The January 2010 Budget Impact Projections Report by Novation an Irving Texas-based healthcare contracting supply company found that the cost of medical-surgical instruments increased 11 percent in 2009 and 16 percent in 2008 while surgical supplies rose 06 percent in 2009 after seeing a 22 percent rise in 2008 and laboratory instruments and equipment experienced modest price increases in 2008 and 2009 Other factors influencing hospital supply chain budgeting include the price of gasoline which increased 552 percent in 2009 The cost of intermediate finished goods (less food) increased 32 percent for hospitals during the past 12 months and freight trucking costs decreased 14 percent in 2009 Novationrsquos healthcare supply chain projections for 2010 indicate the CPI for food is projected to increase 25 percent to 35 percent Factors in 2010 that could raise food prices the report says include the weakening US dollar economic

speculation low production levels and energy costs Hospitals could also be hit with dramatic price increases for centrifuged latex which are linked to supply and demand for oil Latex prices have increased 325 percent over the last three months and have increased every month since June 2009 A new report on supply chain intelligence from the Aberdeen Group shows that knowing where supply chain weaknesses are can boost the bottom line The report found top performing companies are 56 percent more likely to perform a root cause analysis of supply chain problems They are also 97 percent more likely to use suppliercarrier performance scorecards researchers found According to Tim Dumond a principal at Grant Thornton LLPA business contingency plans need to start by identifying all possible risks throughout the organizationrsquos supply chain including vendors If hospital executives think going overseas for some supplies may help they might want to consider this from the new Grant Thornton 2010 Supply Chain Solutions Survey 49 percent of respondents said global sourcing has increased their ROI down from 54 percent last year

6 Growth estimates optimistic says rubber body by fe Bureau Yahoo Finance India March 24 2010

Global supply of natural rubber is unlikely to rise beyond 6 this year according to an assessment made by Association of Natural Rubber Producing Countries (ANRPC) In its recent assessment the Malaysia-based organisation said the figure of 6 too looks optimistic as the forecasts were made in the first week of March assuming favourable weather and high level of prices ldquoSevere drought in major producing countries has not been counted in the forecastsrdquo ANRPC secretary general Djoko Said Damardjati said The report pointed out that in Indonesia rubber trees spread across 55000 ha were cut in 2009 and few more would be cut this year for replanting under a government programme As the planting rate was very low in 2003 and 2004 trees newly attaining yielding age would be very limited this year

ldquoSo a 67 output rise anticipated for 2010 in Indonesia seems to be an optimistic onerdquo the report said adding that in Malaysia as well a 168 rise in production is highly optimistic as the tapped area has been consistently declining since the last six years Thailandrsquos production grew 24 in 2009 to 3164000 tonne according to the official data After this revision ANRPCrsquos estimate of total natural rubber production in 2009 has been calculated at around 8976000 tonne or 19 below the 2008 output ANRPC members account for 94 of the world rubber production At the same time preliminary estimates show a robust demand in rubber globally Import of natural rubber by China alone surged by 68 the report added


7 China tire sales to advance 10 -Sumitomo Rubber From Bloomberg March 15 2010

Tire sales in China the largest rubber consumer will grow at three times the global rate as car ownership increases Sumitomo Rubber Industries Ltd said Sales will increase about 10 percent a year from almost 150 million tires in 2009 compared with a global gain of 3 percent President Tetsuji Mino said in an interview Still the current level of global prices will not be sustained he said Sumitomo Rubber is the second-biggest tire maker in Japan after Bridgestone Corp China overtook the US as the worldrsquos largest auto market last year as government stimulus policies boosted sales by more than 40 percent Surging demand helped increase consumption of natural

rubber used in tires doubling the price in 2009ldquoWe are sure that China is the most promising marketrdquo Mino said in Tokyo on March 12 ldquoCar ownership is spreading from wealthy people to ordinary consumersrdquo Motorists replaced about 100 million tires in China last year or about 11 percent of global sales while new vehicles needed as many as 50 million tires Mino said Car sales may slow if China boosts interest rates while replacement tire demand will stay strong regardless of policy he said Global ldquoprices have stayed around a historically high levelrdquo Mino said ldquoI personally donrsquot expect the current level will be sustained given market fundamentalsrdquo

8 Rubber price hits all time high March 12 2010

The price of Natural Rubber hits an all time high of Rs 14525 per 100 kg on Thursday RSS (Ribbed Smoked Sheet) 4 grade was today quoted at Rs 14525 at Kottayam and Rs 14500 at Kochi markets The Earlier record price was tagged on August 29 2008 at 1425 per kg The market was fluctuating and moving in tandem with global markets The market was showing a steady increase from March 1 to 6 On March 1 the price was Rs 14250 and rose to Rs 14300 on March 3 Rs 14350 on March Rs 14400 on 5th and Rs 14425 on 6th It declined a little and was steady at Rs 14000 on 8th and 9th

Again it showed an upward trend and quoted at Rs 14425 on March 10 and hit a record high of Rs 14525 today Production has come to a standstill in most of the areas in the state due to the annual leaf fall High temperature was another reason for the production shortfall There was demand but growers were not releasing rubber Anticipating higher rate the growers were holding stock Indian Rubber Dealers Federation spokesman said According to unofficial sources the rate was even quoted at Rs 14600 today

9 PolymerLatex with significant price increase as of 1st April 2010 March 11 2010

Due to escalating feedstock costs PolymerLatex is forced to increase prices for all product groups significantly as of 1st April 2010 The extent of the price increase of the various product groups will be communicated as soon as possible However we see already the necessity to give this heads-up with regards to the extra ordinary developments in the feedstock markets world wide The actual imbalances in feedstock demand and supply have already led to serious price shifts between the different world regions The olefins feedstock markets are challenged by planned and

unplanned outages with various goods in short supply and robust demand Headquartered in Marl Germany PolymerLatex GmbH is one the worldrsquos leading producers of synthetic latex From production sites in Germany Dubai Finland Italy and Malaysia PolymerLatex supplies customers worldwide in the adhesives carpet construction amp paints protective glove molded foam paper and textile industries As a leading company for individual application solutions and innovative latex technologies we aim to transform our customersrsquo requirements into superior solutions - one of the major goals of our corporate mission Sales revenues in 2009 amounted to approximately EUR 387 m and the company employs some 600 persons


10 Adventarsquos 1QFY10 net profit jumps 189 by Joy Lee The Edge March 3 2010

KUALA LUMPUR Glove maker ADVENTA BHD []rsquos net profit for the first quarter ended Jan 31 2010 (1QFY10) jumped 189 to RM935 million from RM323 million a year earlier on the back of a 125 rise in revenue to RM7664 million boosted by additional capacity Earnings per share (EPS) improved to 643 sen from 232 sen previously The company did not declare any dividend Adventa said global demand for medical gloves remained robust and the trend was expected to continue for the remaining part of the year ldquoDemand of both sterile surgical gloves and non-sterile examination gloves is strong in all markets With Asia and South America showing a surging increase in usage of medical gloves in part from a higher standard of healthcare delivery and better understanding of medical risks containment and the matured market

increasing the typical 5 to 10 there will be a need for higher supply in the yearrdquo it said in notes accompanying its financial results Natural rubber latex prices have shot up strongly in the quarter from the cyclical lower output months of February to May Additionally uncertainties in the equities markets which fuelled speculation in the commodities contributed to the high prices ldquoThis needs to be passed on to the consumer which has in the past been successful and we do not see any difficulties this year in this respect as the commodity prices are well publicisedrdquo the company added Adventa said there may be a small change in margins in the next quarter from the time lag in price increments However the company does not expect a full-year margin impact

11 Bridgestone Europe increases its price Rubber World February 25 2010

Bridgestone Europe NVSA announced Wednesday that it will increase prices on all tires beginning on April 1 2010 in response to the continuously escalating cost of raw materials most notably natural rubber The price increases which will vary by product category and market will be in the range of

3 percent to 5 percent According to Gerry Duffy vice president sales and marketing of Bridgestone Europe ldquoWhile we are making intense efforts to mitigate the impact of raw material cost increases regrettably we have no option but to reflect a portion of the cost increase in the tire pricerdquo

12 Pirelli Tyre 4-6 Per Cent Price Increase In European Markets For Car Motorcycle And Truck Tyres February 19 2010

Milan 19 February 2010 ndash Pirelli announces a 4 to 6 per cent price increase for all car Suv light truck motorcycle and industrial vehicle tyres in European markets The increase

effective from 1 April 2010 follows the growth of raw materials costs especially that of natural rubber which more than doubled in the last 12 months


13 High rubber prices could deflate tyre manufacturersrsquo profitability Livemintcom The Wall Street Journal February 14 2010

Raw material cost on an average is likely to be higher by 15 sequentially thereby affecting operating profit margins

Although rubber prices have been moving northward for the last eight months the highest spurt from Rs110 per kg to Rs140 per kg was in November and December This did not however adversely affect profitability of tyre makers in the December quarter Companies rode the benefit of the low-cost inventory of rubber they had piled up Besides the input cost hike was partly offset by the increase in tyre prices which was absorbed by the buoyant original equipment and replacement market

The coming quarter however may tell a different tale True with a 6 increase in domestic rubber production in January over the year-ago period rubber prices have now softened to Rs134 per kg from the peak of Rs140 per kg The rubber output for January was around 97500 tonnes against around 91000 tonnes in January

Traders in the commodity say rubber prices may sustain at these levels as there is a two-month stock of rubber This is good news but will reflect in higher input costs for tyre makers in the March quarterRaw material cost on an average is likely to be higher by 15 sequentially thereby affecting operating profit margins One must note that for the December quarter the average cost of rubber was only Rs113-115 per kg for

most companies Apollo Tyres Ltd reported an operating profit margin of around 16 during that quarter around 2 percentage points higher than the preceding sequential quarterMRF Ltd too was able to maintain the margin despite higher rubber prices

According to Rajiv Buddhiraja director general Automotive Tyre Manufacturers Association ldquoThe higher input costs by way of both natural and synthetic rubber prices will impact company financials in the fourth quarter even as one may see a top line growthrdquo In other words while revenue will increase due to higher sales volumes and tyre prices cost pressures will come in with a lag in the fourth quarter The increase in crude oil prices in the last few months has led to a rise in the price of synthetic rubber

Another twist to the tale could be the change in excise duty on tyres During the cut-back in duties excise duty on tyres was cut from 12 to 8 Although not desirable according to the tyre industry the duty could be increased by 2-3 percentage points in the forthcoming BudgetSo far the good news is that strong demand has given tyre companies the leeway to pass on cost increase at least partly to consumers ost companies have increased tyre prices by 8-12 in the current fiscal year in phasesHowever the rise in input input costs has outstripped this Analystsrsquo consensus is that the operating profit margin for the March quarter could drop by around 2-3 percentage points

14 Tyremaker Michelin on alert as rubber prices rise Reuters February 12 2010

PARIS Feb 12 (Reuters) - French tyremaker Michelin said rising rubber prices and an unclear market outlook were making it ldquoextremely vigilantrdquo after it missed forecasts for 2009 net profit hitting its shares

ldquoThe market visibility prevailing in early 2010 and the rising cost of raw materials (particularly natural rubber) are prompting us to exercise extreme vigilancerdquo Michelin managing partner Michel Rollier said in a statement on FridayThe group hit by the global downturn confirmed its target of generating positive free cash flow

in 2010 and proposed an unchanged 1 euro dividend for 2009

Michelin like carmaker Renault earlier this week did not give a forecast for 2010 which unnerved investors who had hoped for a recovery

ldquoIn such an uncertain environment and with the lack of visibility we have it is not possible for us to predict a trend for (the companyrsquos) operating resultrdquo Rollier told reporters


15 World rubber supply tight but price outlook bullish by Bloomberg February 12 2010

The Association of Natural Rubber Producing Countries (ANRPC) reports that global natural rubber supplies are tight and the outlook is bullish on favourable fundamentals The ANRPC secretary-general Djoko Said Damardjati says that exporting countries are oriented towards ensuring the best price which will improve farm income and export earnings He adds that no producer nation holds any buffer stock Rubber prices doubled in 2009 the best performance since at least 1976 driven by optimism that demand is increasing as the world recovers from recession and producers curbs supplies The associationrsquos members include Cambodia China India Indonesia Malaysia Papua New Guinea Singapore Sri Lanka Thailand and Vietnam Total output from these countries represents about 94 of global supply Bangkok-based Future Agri Trade marketing official Umaporn Thepnuan is optimistic that prices could move up further Using price history as a guide she says that futures in Tokyo may climb to 350 yenkg or $3891t should they close above 3038 yen the highest end-session level since September 2008 Thailand Indonesia and Malaysia the three biggest growers view the current price as appropriate and agreed to take steps to counter any negative trends according to a joint statement after a meeting last week in Kuala Lumpur

The International Rubber Consortium which represents growers and exporters says that nations put on hold plans to curb exports as the economic recovery boosts prices and demand Supply was cut after prices fell to 998 yenkg or $1103 a metric ton in December 2008 the lowest level since August 2002 The price has almost tripled since then to 2846 yenkg ldquoThe industry is passing through a situation of tight supply caused by a progressive decline in production and a marked rebound in demandrdquo says Said Damardjati The ANRPC has raised its prediction for output this year in Indonesia the second-largest producer to 277-million tons from 268-million tons It also reports that Indiarsquos production may total 853 000 t up from the previous estimate of 84 000 t Vietnam may produce 770 000 t up from 680 000 t and exports will probably be 750 000 t Total supply of natural rubber in the ANRPC member countries declined by 51 in 2009 to 87-million tons The plantation area expanded to 713-million hectares at the end of 2009 from 702-million hectares a year earlier The ANRPC is an inter-governmental organisation established in 1970 Its membership is open to the governments of countries producing natural rubber The ANRPC aims to continuously improve productivity of rubber holdings reduce cost increase value addition in downstream rubber sector explore sources of ancillary income capitalise on eco-friendly credentials of natural rubber and thereby improve the well-being of rubber farmers

16 Latex rubber price closes above 700 senkg for first time sine rsquo08 by Michael Prather February 12 2010

Natural rubber latex prices surpassed 700 senkg today to close at 703 The rally marked the first time prices closed above the 700 milestone since July 2008 when rising oil

prices new regulatory standards and factory shutdowns sent disposable glove prices soaring to record highs


17 Producers tap into demand for rubber as price soars by Kevin Brown in Rantau Malaysia Financial Times February 2 2010

1The Bradwall estate managerrsquos house built in 1912 on the highest hill in Rantau is little changed from the days when the English author Somerset Maugham travelled the Federated Malay States in the 1920s chronicling the lives of its colonial planters Inside the snooker table retains pride of place watched over by a Michael Jackson poster put up by the plantation workers for whom the house is now a social club Outside the estate stretches away through the low hills of Negeri Sembilan much as it did nearly a century ago although many of its tall slim rubber trees have been replaced by dark and brooding oil palms the main plantation crop of modern Malaysia Now though it is natural rubber that is in the spotlight thanks to a surge in demand and supply disruptions that have pushed averagebenchmark rubber prices to near a 56-year high ldquoThis is a good time to be in rubberrdquo says Nageeb Wahab a senior vice-president of Sime Darby the Malaysian conglomerate that owns rubber plantations in Malaysia and Indonesia including Bradwall The benchmark surged last month to $320 per kg up from $110 per kg in December 2008 and within a whisker of the 56-year peak of $325 per kg hit in mid-2008 As a result tyre companies which account for the bulk of natural rubber consumption have been lifting their prices Hankook Tire Co the South Korea-based company that is the worldrsquos seventh-largest tyre producer recently announced price increases because of higher rubber costs Other industrial consumers from glove manufacturers to condoms producers are likely to follow suit soon The high prices have prompted Sime Darby to consider expanding its rubber plantations Yet there are huge uncertainties about the forces that have driven the recent surge in prices and whether it will end in a repetition of last yearrsquos crash Economists say that there are several possible causes for the latest price spike including - A fall in global production through 2009 caused by a reduction in yields as a result of wet weather in big producer countries such as Thailand the worldrsquos largest as well as Malaysia

and Indonesia The trio account for almost 75 per cent of global natural rubber output The fall is estimated at 51 per cent by the Association of Natural Rubber Producing Countries which represents the largest producers Other estimates by trade associations and analysts appear even higher - Rising demand as the global recovery took effect in the second half of the year especially from China where the booming automobile industry is generating a large increase in tyre production the destination for about 70 per cent of natural rubber output Health scares such as the swine flu epidemic helped raise demand for higher quality latex used for products such as surgical gloves - Higher oil prices increased the price of synthetic rubber an oil derivative which competes with the natural product in some industries - The strong flow of funds seeking investment opportunities in faster growing Asian markets including commodities such as rubber In public governments are taking a sanguine view Bernard Dompok Malaysiarsquos commodities minister said last month that he expected rubber to trade at between $240 and $3 per kg for the rest of this year However industry officials said that the three biggest rubber producers - Thailand Indonesia and Malaysia - were sufficiently concerned about the level and volatility of prices to discuss intervention including releasing stocks at a recent meeting in Kuala Lumpur although they decided to take no action Forecasting is complicated by a surge in planting between 2005 and 2008 which will bring an estimated 1m hectares of new trees into production between next year and 2015 Production is rising fast although from a low base in Cambodia Vietnam China and India Djoko Said Damardjati secretary-general of the Association of Natural Rubber Producing Countries expects production and consumption to rise over the medium term with prices remaining at a ldquoreasonablerdquo level helped by rising prices for synthetic rubber alternatives The International Rubber Study Group a trady body based in Singapore estimates that natural


rubber consumption will climb to 14m tonnes by 2019 up almost 35 per cent from a forecast of 104m tonnes in 2010 However forecasts would be disrupted by a return to recession in the west as fiscal and monetary stimulus measures are withdrawn And economists and traders say that even if the world avoids another economic crisis the short-term outlook for the rubber industry could be extremely volatile due to weather related supply disruptions Makoto Sugitani senior director of commodities for Newedge in Tokyo a major centre for rubber trading says that prices could rise considerably higher in the near future largely driven by investorsrsquo exuberant confidence in Asia rather than by industry fundamentals ldquoIt is difficult to forecast prices because if they break the previous high [in mid 2008] there is no price ceilingrdquo says Mr Sugitani

The downside though is that the market is at risk of a serious correction if confidence sags ldquoIf anything goes wrong in the whole of this complex economic structure then rubber prices could fall 20 to 30 per centrdquo Mr Sugitani says ANRPC members ndash Cambodia China India Indonesia Malaysia Papua New Guinea Singapore Sri Lanka Thailand and Vietnam ndash account for almost 94 of the worldrsquos rubber supplyDjoko told StarBiz yesterday that none of the NR producing countries currently hold any NR buffer stock contrary to a recent report on a buffer stock of 300000 tonnes

ldquoPolicies pursued in the major NR exporting countries are oriented towards ensuring the best price for NR with a view to enhance farmersrsquo income and improving export earningsrdquo he saidHe added that putting a cap on rubber prices was not on the agenda of major exporting countries

According to ANRPCrsquos January 2010 newsletter NR market continued to be bulllish from December 2009 to January this yearThe current buoyant rubber market was contributed by continued fall in global NR supply and a further drop anticipated in the coming months due to winteringThere was also surging NR demand especially from China and MalaysiaDjoko said ldquoMalaysia posted a marked increase in NR imports of about 637 annualised rate in the second half of 2009rdquoLast year Malaysia imported 718000 tonnes of NR compared with 523000 tonnes in 2008Chinarsquos consumption of NR grew at an annualised 167 in the third quarter and 302 in the fourth quarter 2009In addition the weakening US dollar against currencies of major NR exporting countries and the sharp rise in crude oil prices helped boost rubber pricesIn 2009 the total supply of NR of ANRPC members fell 51 to 8686 million tonnes from 9150 million tonnes in 2008The NR output in Malaysia dropped drastically by 221 as yielding area shrank by 20000ha in 2009ANRPC said Malaysiarsquos estimated NR output for 2009 was 835000 tonnes compared with 1072 million tonnes in 2008Top producer Thailand also saw a 61 drop in supply last year as the estimated average annual yield came down to 1576 kg per hectare from 1698 kg per hectare in 2008Indonesiarsquos production fell 57 in 2009 as the average annual yield dropped to 937 kg per hectare from 994 kg per hectare the previous yearHowever for 2010 ANRPC expects NR production of Indonesia to increase to 277 million tonnes from an estimated 259 million tonnes in 2009

18 Natural rubber prices likely to remain high by HANIM ADNAN The Star January 27 2010

PETALING JAYA Current fundamentals look favourable for natural rubber (NR) prices to stay bullish said Association of Natural Rubber Producing Countries (ANRPC) secretary-general Prof Djoko Said Damardjati

He said there was a tight supply situation caused

by a progressive decline in global production and a marked rebound in demand

Yesterday tyre-grade SMR 20 closed two sen higher at RM1019 per kg while Latex-In-Bulk rose RM150 to settle at RM696 per kg


19 Strong demand to boost rubber prices Business Time Malaysia January 23 2010

The Malaysian rubber market is expected to be higher next week on strong demand and lack of supply after prices reached a two-year high at midweek dealers saidThey said rubber prices will continue to rise as there was strong overseas demand seen especially from tyre and rubber glove manufacturers

Local rubber prices are also likely to take their cue from regional markets which are booming also on supply concerns and strong demand For the week just ended prices were mostly higher as investors took their cue from the uptrend on regional marketsOn Wednesday rubber prices climbed to a two-

year high propelled by the lack of supply and strong demand The SMR 20 hit 10320 sen per kg on Wednesday On a week-to-week basis the Malaysian Rubber Board (MRB) official physical noon price for tyre-grade SMR 20 increased 165 sen to settle at 1029 sen per kg from last Fridayrsquos 10125 sen per kg while latex in bulk rose 385 sen to 699 sen per kg from 6605 sen per kg previously

The unofficial closing price for tyre-grade SMR 20 gained 12 sen to 10235 sen per kg from 10115 sen per kg Latex in bulk also added 23 sen to 6895 sen per kg from 6665 sen per kg last week ndash Bernama

20 Rubber prices to rise further amid concern over supply New Sabah Times January 18 2010

KUALA LUMPUR Malaysian rubber prices are expected to rise further this week amid concern over tight supply of the commodity dealers saidldquoSupply shortages are still a major issue and this would continue to push prices uprdquo said one of them

According to a report by the Association of Natural Rubber Producing Countries the eight largest producers ndash Thailand Indonesia Malaysia India Vietnam China Sri Lanka and Cambodia ndash saw supply declining by 51 per cent in aggregate last year through OctoberThe biggest drop in output came from Malaysia which produced 879000 metric tonnes a 206 per cent drop compared with 107 million tonnes in 2008

Supply was expected to decrease again during the wintering dry season starting late February to mid-April

Another dealer said there was still room for local rubber prices to move further up as they were still considered cheap compared with those in some regional markets like Thailand Indonesia and Singapore that had already surpassed 1200 sen per kgThe SMR 20 price had exceeded 1000 sen per kg this week The highest level seen was

in July 2008 when the price touched 1051 sen per kg due to tight supply and uncertain weather conditions

According to reports Malaysia Thailand and Indonesia are scheduled to hold a ministerial meeting on Jan 17-19 to seek ways to stabilise pricesThe top three producers had cut exports to balance prices before namely after it hit a 56-year peak of US$325 a kg in July 2008 but then dropped to US$110 a kg five months later

As prices recovered in 2009 little was done to restrict exportsldquoJust wait and see what will be the outcome from the meetingrdquo said a dealerOn a Friday-to-Friday basis the Malaysian Rubber Board official physical price for tyre-grade SMR 20 jumped 205 sen to 101150 sen per kg from 99200 sen per kgLatex in bulk climbed 23 sen to 66050 sen per kg from 63750 sen per kg previouslyThe unofficial sellersrsquo 5pm price for SMR 20 shored up 19 sen to 101150 sen per kg from 99250 sen per kg while latex in bulk surged 28 sen to 66650 sen per kg from 63850 sen per kg previously


21 Rubber glove prices may rise this year By DAVID TAN The Star January 18 2010

Rubber gloves from Malaysia are likely to cost more this year as latex prices are expected to go up The price of rubber gloves is expected to rise following the Association of Natural Rubber Producing Countriesrsquo announcement recently that it was considering fixing latex prices at a ldquoreasonable levelrdquo of US$260 per kg an increase of about 33 from about US$195 per kg currently Latex prices hit a 56-year peak of US$325 per kg in July 2008

Latexx Partners Bhd chairman and chief executive officer Low Bok Tek told StarBiz the company would have to pass on the cost of higher latex prices to its customers should there be an increaseldquoLatex constitutes more than 50 of the raw materials used in our production of rubber medical gloves The price increase may prompt rubber glove producers to use synthetic rubber an oil-based raw material if there is no corresponding increase in the pricing of petroleumrdquo Low said

Rubber medical gloves being produced at Latexx Partners plant in Kamunting Industrial EstateHe added that the present price of rubber medical gloves was about US$30 per 1000 pieces based on latex at US$195 per kgTop Glove Corp Bhd chairman Tan Sri Lim Wee Chai said the company would revise its rubber glove prices accordingly depending on latex prices

ldquoThe selling price also depends on other factors such as the exchange rate crude oil price and labour costldquoAs rubber medical gloves are a necessity in the medical industry we do not foresee any impact on the export of rubber gloves from Malaysia as the industry has gone through many up and down cycles in latex pricerdquo he said adding that ldquoThe global demand for rubber gloves is expected to be about 150 billion pieces for 2010

rdquoEnglotechs Holdings Bhd managing director Datuk Eng Hok Sing said should there be an increase of about 15 in latex prices the price of its industrial rubber-coated gloves would rise by between 6 and 8

Our industrial rubber-coated gloves are selling at US$1 per pair nowrdquo he added

Maxi Support Sdn Bhd a Penang-based medium-sized producer of rubber household gloves also expects the price of its gloves to increase by 10 this year

Director Freddie Ong said the companyrsquos gloves marketed under the Duramitt brand name were presently sold at 25 US cents per pairOSK Research rubber glove sector analyst Jason Yap reckons that even if latex prices were fixed at US$260 per kg the export of natural rubber gloves from Malaysia would not be affected

ldquoThis is because of the strong demand from the medical and hygiene sectors The global consumption of rubber household and industrial gloves should gradually pick up also due to the improvement in the economyrdquo he saidMeanwhile in response to the growing demand for medical rubber gloves in 2010 Latexx Partners is investing RM70mil to add 30 production lines this year to increase its annual output to nine billion gloves from the current six billion

ldquoOver the next five years we will set up two more plants in Kamunting Industrial Estate With the additional two plants our annual output of medical gloves would be raised to 15 billionrdquo Low said adding that the US market absorbed about 50 of the grouprsquos medical glovesldquoWe import about 80 of our raw materials from Thailand and source the balance locallyrdquo he added

Top Glove also plans to increase its production capacity by about 12 in 2010 Said Lim ldquoFor the plant in Banting we are adding eight production lines with the capacity of 075 billion pieces per annum This expansion exercise is scheduled for completion in June 2010rdquoFor each of its two plants in Klang Top Glove would add 16 production lines raising their capacity to 15 billion pieces per annum each he said adding that this exercise would be completed by AugustMeanwhile its planned installation of 32 lines with a combined annual production capacity of 3 billion pieces for its Ipoh facility was targeted for completion in February next year Lim saidOSKrsquos Yap said a shortage of rubber gloves could be expected in the first quarter of this yearldquoThis is because there have been constraints to new capacity expansion in Malaysia as there was no new natural gas supply made available for the industryrdquo he saidWhile using biomass to generate power was an alternative it would take 12 to 15 months to get a biomass boiler ready for use he saidldquoThus we expect new capacity to kick in only in the second half of 2010rdquo said Yap


22 Natural rubber latex prices continue climb TradexGloves January 8 2010

As first reported last month natural rubber latex prices continue to rise behind a weakened global supply despite peak season conditions in many rubber-producing countries In Malaysia one of the worldrsquos largest producers of NRL the commodity traded at over 637 senkg Fridayndashup about 6 from last month Adding to the causes behind the increased rubber prices- Production fell 11 from January-September 2009ndashthe biggest drop in more than 34 yearsndash due to adverse weather conditions in rubber producing countries replanting and a struggling

global economy (Association of the Natural Rubber Producing Countries) - Natural rubber prices are tied to crude oil which is used to produce synthetic rubber alternatives rude oil prices are up nearly 20 since July according to the US Department of Energy - Earlier this week China reduced import tariffs on natural rubber driving prices on speculation that the country may ramp up buying As one of the worldrsquos largest tire producing countries analysts suggest China may become more aggressive amidst a growing global automotive industry

23 Tyre Industry Needs 4 Price to Offset Natural Rubber Costs January 7 2010

Since natural rubber represents approximately 30 per cent of a tyre makerrsquos raw material costs tyre manufacturers are going to have to increase prices in response according to Deutsche BankAssuming foreign exchange rates remain stable the sky-rocketing natural rubber price means the tyre industry will have to increase selling price by 3-4 to offset this raw material Thatrsquos the view of Deutsche Bank analysts who report in

a recent investors note that the natural rubber price has doubled over the last 12 months from US$15kg to US$30kg (RSS3 grade) This increase will have a four to six months lag effect on tyre companiesrsquo profit and losshellipSo far we have no reason to be worried sincehellipend market volumes are recovering (especially on passenger car tyreshellipinventories at dealers are low (sell in markets have been worse than sell out markets)rdquo they analysts explained

24 Natural rubber prices on the march may surpass RM10 mark By Zaidi Isham Ismail Business Time Malaysia January 5 2010

A Penang-based trader said NR prices such as for SMR 20 are fast rising due to the on-going wintering season which dampens latex flow as well as a recovering global demand for rubber-based products such as tyres and condomsldquoNR prices are on the rise and are eyeing a new high its first climb in 18 months and may surpass RM10 a kg in the near termrdquo the trader told Business Times in a phone interviewKossan Rubber Industries Bhd technical adviser to the chief executive officer Datuk Ong Eng Long said NR prices are on the rise due to the wintering season as well as strong demand which has always been there despite the global economic slowdownldquoRubber glove makers for example have been receiving good demand for their latex gloves despite the global economic slowdownldquoNow that the global economy is recovering and the wintering season is setting in NR prices will remain strong with demand such as from China

which would want to feed its hungry automotive industry which include supplying tyresrdquo Ong told Business TimesAn industry player who declined to be named said the volatile political situation in Thailand which is the worldrsquos largest NR producer will always be a concern for rubber producer and consumers alike thus lending strong support for NR pricesldquoFurther more crude oil prices has also topped US$80 a barrel (RM27360) which in turn has pushed up synthetic rubber prices This will make NR more competitiverdquo Meanwhile a Malaysian Rubber Board official said traditionally demand for commodities such as rubber will shoot up right after an economic crisis due to low inventories during hard timesldquoInventories has been low since the crisis started and industry players are flocking to the market again to buy and replenish stockpile after holding back on spending last yearrdquo said the official


1 Rubber prices reach new highs by HANIM ADNAN The Star On Line April 26 2010

Rubber is one of the hottest commodities traded so far this year with price rallies seen in most international rubber exchanges Tyre-grade Standard Malaysian Rubber (SMR 20) has also been hitting new highs particularly in the past three months and currently trading above the RM10600 per tonne level According to Association of Natural Rubber Producing Countries (ANRPC) director-general Prof Djoko Said Damardjati tightness in rubber supply would remain an issue amid an upsurge in demand from China and India for their booming auto and tyre manufacturing industries ldquoSevere drought the current wintering season as well as active replanting activities in most major producing countries could affect rubber output ldquoEven the preliminary estimates from members of ANRPC indicate that the global rubber supply is unlikely to rise above 6 this yearrdquo he told StarBiz recently ANRPC had earlier estimate that global rubber production could reach 95 milllion tonnes this year up by about 63 from last yearrsquos 89 million tonnes Djoko also expected rubber supply to remain tight until 2011 A large extent of existing yielding trees in major producing countries were planted in 1980s ldquoMost of the trees planted have reached declining yield phase thus the age composition of the existing yielding area is unfavourable for yield improvementrdquo he added Djoko noted that Indonesia and Malaysia had undertaken active replanting activities since 2005 ldquoI believe rubber prices will remain firm for quite some time until supply recovers possibly by early 2012rdquo Apart from the buoyant demand and drought-ridden supply he said other factors influencing the rubber market included the weakening US dollar volatility in yen and the increasing crude oil prices Members of the ANRPC countries account for about 94 of the total world natural rubber production

Interestingly more than 45 of global consumption of natural rubber is in China India and Malaysia which are the major consuming countries in the ANRPC ANRPC in its latest report said imports from China during January to February surged 63 for natural rubber and 118 for compound rubber compared with the same period last year During the same period India posted a 17 increase in natural rubber consumption given the large-scale capacity in its auto tyre manufacturing operation Meanwhile Hwang DBS Vickers Research has also raised its 2010-2012 forecast rubber prices by 39 to 44 as its previous forecasts had not taken into account the price recovery on the back of stronger crude oil prices The brokerage said ldquoWe believe strong demand recovery for the automotive sector in China and supply constraint due to ongoing conversions to oil palm and the wintering season between February and April would contribute to the jump in rubber prices Our assumptions are factoring in 29 lower prices in the second half of 2010 compared with the first halfrdquo One analyst with a local stockbroking firm said the recent automobile industry statistics unveiled that the pick-up in the auto sector in China and the United States had been strong The automobile industry is the single biggest user of latex easily consuming about 70 of the world latex production While some might argue that the price upsurge could be short-term given the traditional low supply wintering season however many feel that the current price hike was a reflection of strong demand ldquoEven with a possible price reduction down the line natural rubber prices are unlikely to ease to the low levels of December 2008 and January 2009rdquo he added










































































































































































































































































































































































































































































































































































































































































































































































































































































































































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