Natural Rubber Price Increase Reference list 1.

2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.

April 2010

Rubber prices reach new highs, by Hanim Adnan, The Star On Line, April 26, 2010 Malaysia Top Glove can weather rising costs, by By Soo Ai Peng, Reuters, April 14 Glovemakers fall on costs concern, Business Times, April 13, 2010 Top Glove may raise prices if US$ falls, latex cost rises, by By Ooi Tee Ching, Business Times, April 1, 2010 Inflationary prices challenge hospital supply chain spending, Healthcare Finance News, April 1, 2010 Growth estimates optimistic, says rubber body, By fe Bureau. Yahoo Finance India, March 24, 2010 China tire sales to advance 10%, -Sumitomo Rubber, From Bloomberg, March 15, 2010 Rubber price hits all time high, March 12, 2010 PolymerLatex with significant price increase as of 1st April 2010. March 11, 2010 Adventas 1QFY10 net profit jumps 189% by Joy Lee. The Edge, March 03, 2010 Bridgestone Europe increases its price. Rubber World, February 25, 2010 Pirelli Tyre: 4-6 Per Cent Price Increase In European Markets For Car, Motorcycle And Truck Tyres. February 19, 2010. High rubber prices could deflate tyre manufacturers profitability. Livemint.com, The Wall Street Journal, February 14, 2010 Tyre maker Michelin on alert as rubber prices rise. Reuters, February 12, 2010 World rubber supply tight, but price outlook bullish by Bloomberg. February 12, 2010. Latex rubber price closes above 700 sen/kg for first time sine 08 by Michael Prather, February 12, 2010. Producers tap into demand for rubber as price soars by Kevin Brown in Rantau, Malaysia. Financial Times, February 2, 2010 Natural rubber prices likely to remain high, by Hanim Adnan. The Star, January 27, 2010. Business Time Malaysia: Strong demand to boost rubber prices. January 23, 2010. Rubber prices to rise further amid concern over supply. New Sabah Times, January 18, 2010. Rubber glove prices may rise this year by David Tan. January 18, 2010. Natural rubber latex prices continue climb. January 8, 2010. Tyre Industry Needs 4% Price to Offset Natural Rubber Costs. January 7, 2010. Natural rubber prices on the march may surpass RM10 by Zaidi Isham Ismail. Business Time Malaysia, January 5, 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 RM10,600 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. Severe drought, the current wintering season as well as active replanting activities in most major producing countries could affect rubber output. Even the preliminary estimates from members of ANRPC indicate that the global rubber supply is unlikely to rise above 6% this year, he told StarBiz recently. ANRPC had earlier estimate that global rubber production could reach 9.5 milllion tonnes this year, up by about 6.3% from last years 8.9 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. Most of the trees planted have reached declining yield phase, thus the age composition of the existing yielding area is unfavourable for yield improvement, he added. Djoko noted that Indonesia and Malaysia had undertaken active replanting activities since 2005. I believe rubber prices will remain firm for quite some time until supply recovers, possibly by early 2012. Apart from the buoyant demand and droughtridden 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: We believe strong demand recovery for the automotive sector in China and supply constraint due to ongoing conversions to oil palmandthewinteringseasonbetweenFebruaryand 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 half. 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. Even with a possible price reduction down the line, natural rubber prices are unlikely to ease to the low levels of December 2008 and January 2009, he added.

Natural Rubber Price Increase - Reference list - April 2010

2. Malaysia Top Glove can weather rising costs by By Soo Ai Peng, Reuters, April 14, 2010
Malaysias Top Glove (TPGC.KL) 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 worlds 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. Any 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 cost, 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 yearto-date, making it the best performing Asian currency A stronger ringgit will hurt glove makers profits as their products are sold in U.S. dollar. Malaysian rubber glove makers supply more than 60 percent of the worlds 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 1.4 percent. Smaller rivals Supermax (SUPM. KL) was up 1.5 percent and Kossan Rubber (KRIB.KL) added 0.3 percent. Apart from raising glove prices, Top Glove can hedge against rising ringgit by sourcing latex concentrate from Thailand which is transacted in U.S. 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 worlds 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. Additional 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 situation, he said

Natural Rubber Price Increase - Reference list - April 2010

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 4.4 per cent to RM12.90 at the close, its biggest retreat in almost a year. About 21 per cent of the companys revenues in the year to Aug. 31 were made outside Malaysia. Supermax Corp, which makes the majority of its sales in America, slid 3.6 per cent to RM6.64. 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. With higher latex costs, a weaker ringgit against the US dollar and potential pricier energy costs, we see growing concern for earlier-than-expected margin compression, AmResearch said in a report on April 9. Investors are concerned that glove-makers wont be able to pass on all the increased costs to their customers, it said. AmResearch downgraded the sector to underweight on April 9. Top Glove was cut to hold with a lower fair value of RM12.50. Kossan Rubber Industries Bhd was reduced to hold with its fair value trimmed to RM7.65. The stock lost 4.4 per cent to RM7.56 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 worlds 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 RM7.46 per kg. In the last few days, it has been hovering around RM7.40 per kg. In contrast, the greenback has weakened against the ringgit since mid-2009. The US dollar yesterday closed at RM3.26. The combination of these factors has led to higher glove prices. Since the beginning of the year, weve managed to pass on the cost increase to our clients, said chairman and managing director Tan Sri Lim Wee Chai. We need to protect our shareholders interest, 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 worlds biggest glove maker capable of churning out 33 billion pieces and commanding 22 per cent of the global market share, Top Gloves 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. Based on the measures weve taken to protect our profit margin, we should be able to give out more than last years 22 sen a share, said Lim

Natural Rubber Price Increase - Reference list - April 2010

5. Inflationary prices challenge hospital supply chain spending. Healthcare Finance News,
April 1, 2010
IRVING, TX 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 1.1 percent in 2009 and 1.6 percent in 2008, while surgical supplies rose 0.6 percent in 2009 after seeing a 2.2 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 55.2 percent in 2009. The cost of intermediate finished goods (less food) increased 3.2 percent for hospitals during the past 12 months, and freight trucking costs decreased 1.4 percent in 2009. Novations healthcare supply chain projections for 2010 indicate the CPI for food is projected to increase 2.5 percent to 3.5 percent. Factors in 2010 that could raise food prices, the report says, include the weakening U.S. 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 32.5 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 supplier/carrier 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 organizations 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. Severe drought in major producing countries has not been counted in the forecasts, ANRPC secretary general Djoko Said Damardjati said. The report pointed out that in Indonesia, rubber trees spread across 55,000 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. So a 6.7% output rise anticipated for 2010 in Indonesia seems to be an optimistic one, the report said, adding that in Malaysia as well, a 16.8% rise in production is highly optimistic as the tapped area has been consistently declining since the last six years. Thailands production grew 2.4% in 2009 to 3,164,000 tonne, according to the official data. After this revision, ANRPCs estimate of total natural rubber production in 2009 has been calculated at around 8,976,000 tonne or 1.9% 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.

Natural Rubber Price Increase - Reference list - April 2010

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 U.S. as the worlds 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 2009. We are sure that China is the most promising market, Mino said in Tokyo on March 12. Car ownership is spreading from wealthy people to ordinary consumers. 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 prices have stayed around a historically high level, Mino said. I personally dont expect the current level will be sustained given market fundamentals.

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 142.5 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 14,250 and rose to Rs 14,300 on March 3, Rs 14,350 on March, Rs 14,400 on 5th and Rs 14,425 on 6th. It declined a little and was steady at Rs 14,000 on 8th and 9th. Again it showed an upward trend and quoted at Rs 14,425 on March 10 and hit a record high of Rs 14,525 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 14,600 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 worlds leading producers of synthetic latex. From production sites in Germany, Dubai, Finland, Italy and Malaysia, PolymerLatex supplies customers worldwide in the adhesives, carpet, construction & 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 customers 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.

Natural Rubber Price Increase - Reference list - April 2010

10. Adventas 1QFY10 net profit jumps 189% by Joy Lee. The Edge, March 3, 2010
KUALA LUMPUR: Glove maker ADVENTA BHD []s net profit for the first quarter ended Jan 31, 2010 (1QFY10) jumped 189% to RM9.35 million from RM3.23 million a year earlier on the back of a 12.5% rise in revenue to RM76.64 million, boosted by additional capacity. Earnings per share (EPS) improved to 6.43 sen from 2.32 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. Demand 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 year, 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. This 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 publicised, 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 NV/SA 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, While 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 price.

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 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.

Natural Rubber Price Increase - Reference list - April 2010

13. High rubber prices could deflate tyre manufacturers profitability.

Livemint.com, 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 yearago period, rubber prices have now softened to Rs134 per kg from the peak of Rs140 per kg. The rubber output for January was around 97,500 tonnes against around 91,000 tonnes in January. Traders in the commodity say rubber prices may sustain at these levels as there is a twomonth stock of rubber. This is good news, but will reflect in higher input costs for tyre makers in the March quarter. Raw 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 quarter. MRF Ltd, too, was able to maintain the margin despite higher rubber prices. According to Rajiv Buddhiraja, director general, Automotive Tyre Manufacturers Association, The 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 growth. 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 Budget. So 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 phases. However, the rise in input input costs has outstripped this. Analysts 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 extremely vigilant, after it missed forecasts for 2009 net profit, hitting its shares. The market visibility prevailing in early 2010 and the rising cost of raw materials (particularly natural rubber) are prompting us to exercise extreme vigilance, Michelin managing partner Michel Rollier said in a statement on Friday. The 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. In such an uncertain environment and with the lack of visibility we have, it is not possible for us to predict a trend for (the companys) operating result, Rollier told reporters.

Natural Rubber Price Increase - Reference list - April 2010

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 associations 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 yen/kg or $3,891/t, should they close above 303,8 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 99,8 yen/kg, or $1,103 a metric ton, in December 2008, the lowest level since August 2002. The price has almost tripled since then to 284,6 yen/kg. The industry is passing through a situation of tight supply caused by a progressive decline in production and a marked rebound in demand, says Said Damardjati. The ANRPC has raised its prediction for output this year in Indonesia, the second-largest producer, to 2,77-million tons from 2,68-million tons. It also reports that Indias 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 5,1% in 2009 to 8,7-million tons. The plantation area expanded to 7,13-million hectares at the end of 2009 from 7,02-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 wellbeing of rubber farmers.

16. Latex rubber price closes above 700 sen/kg for first time sine 08 by Michael Prather. February 12, 2010.
Natural rubber latex prices sen/kg today to close at 703. the first time prices closed milestone since July 2008, surpassed 700 The rally marked above the 700 when rising oil prices, new regulatory standards, and factory shutdowns sent disposable glove prices soaring to record highs.

Natural Rubber Price Increase - Reference list - April 2010

17. Producers tap into demand for rubber as price soars by Kevin Brown in Rantau, Malaysia. Financial Times, February 2, 2010
1.The Bradwall estate managers 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 56year high. This is a good time to be in rubber, 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 $3.20 per kg, up from $1.10 per kg in December 2008, and within a whisker of the 56year peak of $3.25 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 worlds 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 years 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 worlds 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 5.1 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, Malaysias commodities minister, said last month that he expected rubber to trade at between $2.40 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 reasonable level helped by rising prices for synthetic rubber alternatives. The International Rubber Study Group, a trady body based in Singapore, estimates that natural

Natural Rubber Price Increase - Reference list - April 2010

rubber consumption will climb to 14m tonnes by 2019, up almost 35 per cent from a forecast of 10.4m 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 shortterm 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 investors exuberant confidence in Asia, rather than by industry fundamentals. It is difficult to forecast prices because if they break the previous high [in mid 2008] there is no price ceiling, says Mr Sugitani. The downside, though, is that the market is at risk of a serious correction if confidence sags. If anything goes wrong in the whole of this complex economic structure then rubber prices could fall 20 to 30 per cent, Mr Sugitani says. ANRPC members Cambodia, China, India, Indonesia, Malaysia, Papua New Guinea, Singapore, Sri Lanka, Thailand and Vietnam account for almost 94% of the worlds rubber supply. Djoko 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 300,000 tonnes. Policies pursued in the major NR exporting countries are oriented towards ensuring the best price for NR with a view to enhance farmers income and improving export earnings, he said. He added that putting a cap on rubber prices was not on the agenda of major exporting countries.

According to ANRPCs January 2010 newsletter, NR market continued to be bulllish from December 2009 to January this year. The current buoyant rubber market was contributed by continued fall in global NR supply and a further drop anticipated in the coming months due to wintering. There was also surging NR demand, especially from China and Malaysia. Djoko said: Malaysia posted a marked increase in NR imports of about 63.7% annualised rate in the second half of 2009. Last year, Malaysia imported 718,000 tonnes of NR compared with 523,000 tonnes in 2008. Chinas consumption of NR grew at an annualised 16.7% in the third quarter and 30.2% in the fourth quarter 2009. In addition, the weakening US dollar against currencies of major NR exporting countries and the sharp rise in crude oil prices helped boost rubber prices. In 2009, the total supply of NR of ANRPC members fell 5.1% to 8.686 million tonnes from 9.150 million tonnes in 2008. The NR output in Malaysia dropped drastically by 22.1% as yielding area shrank by 20,000ha in 2009. ANRPC said Malaysias estimated NR output for 2009 was 835,000 tonnes compared with 1.072 million tonnes in 2008. Top producer Thailand also saw a 6.1% drop in supply last year as the estimated average annual yield came down to 1,576 kg per hectare from 1,698 kg per hectare in 2008. Indonesias production fell 5.7% in 2009 as the average annual yield dropped to 937 kg per hectare from 994 kg per hectare the previous year.However, for 2010, ANRPC expects NR production of Indonesia to increase to 2.77 million tonnes from an estimated 2.59 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 RM10.19 per kg while Latex-In-Bulk rose RM1.50 to settle at RM6.96 per kg.

Natural Rubber Price Increase - Reference list - April 2010

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 said. They 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 markets. On Wednesday, rubber prices climbed to a twoyear high propelled by the lack of supply and strong demand. The SMR 20 hit 1,032.0 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 16.5 sen to settle at 1,029 sen per kg from last Fridays 1,012.5 sen per kg while latex in bulk rose 38.5 sen to 699 sen per kg from 660.5 sen per kg previously. The unofficial closing price for tyre-grade SMR 20 gained 12 sen to 1,023.5 sen per kg from 1,011.5 sen per kg. Latex in bulk also added 23 sen to 689.5 sen per kg from 666.5 sen per kg last week. 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 said. Supply shortages are still a major issue and this would continue to push prices up, said one of them. According to a report by the Association of Natural Rubber Producing Countries, the eight largest producers Thailand, Indonesia, Malaysia, India, Vietnam, China, Sri Lanka and Cambodia saw supply declining by 5.1 per cent in aggregate last year through October. The biggest drop in output came from Malaysia, which produced 879,000 metric tonnes, a 20.6 per cent drop compared with 1.07 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 1,200 sen per kg. The SMR 20 price had exceeded 1,000 sen per kg this week. The highest level seen was in July 2008 when the price touched 1,051 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 prices. The top three producers had cut exports to balance prices before, namely after it hit a 56year peak of US$3.25 a kg in July 2008 but then dropped to US$1.10 a kg five months later. As prices recovered in 2009, little was done to restrict exports. Just wait and see what will be the outcome from the meeting, said a dealer. On a Friday-to-Friday basis, the Malaysian Rubber Board official physical price for tyregrade SMR 20 jumped 20.5 sen to 1,011.50 sen per kg from 992.00 sen per kg. Latex in bulk climbed 23 sen to 660.50 sen per kg from 637.50 sen per kg previously. The unofficial sellers 5pm price for SMR 20 shored up 19 sen to 1,011.50 sen per kg from 992.50 sen per kg while latex in bulk surged 28 sen to 666.50 sen per kg from 638.50 sen per kg previously.

Natural Rubber Price Increase - Reference list - April 2010

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 Countries announcement recently that it was considering fixing latex prices at a reasonable level of US$2.60 per kg, an increase of about 33% from about US$1.95 per kg currently. Latex prices hit a 56-year peak of US$3.25 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 increase. Latex 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 petroleum, Low said. Rubber medical gloves being produced at Latexx Partners plant in Kamunting Industrial Estate. He added that the present price of rubber medical gloves was about US$30 per 1,000 pieces, based on latex at US$1.95 per kg. Top Glove Corp Bhd chairman Tan Sri Lim Wee Chai said the company would revise its rubber glove prices accordingly depending on latex prices. The selling price also depends on other factors such as the exchange rate, crude oil price and labour cost. As 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 price, he said adding that: The global demand for rubber gloves is expected to be about 150 billion pieces for 2010. Englotechs 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 now, he added. Maxi Support Sdn Bhd, a Penang-based mediumsized producer of rubber household gloves, also expects the price of its gloves to increase by 10% this year. Director Freddie Ong said the companys gloves, marketed under the Duramitt brand name, were presently sold at 25 US cents per pair. OSK Research rubber glove sector analyst Jason Yap reckons that even if latex prices were fixed at US$2.60 per kg, the export of natural rubber gloves from Malaysia would not be affected. This 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 economy, he said. Meanwhile, 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. Over 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 billion, Low said, adding that the US market absorbed about 50% of the groups medical gloves. We import about 80% of our raw materials from Thailand and source the balance locally, he added. Top Glove also plans to increase its production capacity, by about 12% in 2010. Said Lim: For the plant in Banting, we are adding eight production lines with the capacity of 0.75 billion pieces per annum. This expansion exercise is scheduled for completion in June 2010. For each of its two plants in Klang, Top Glove would add 16 production lines, raising their capacity to 1.5 billion pieces per annum each, he said, adding that this exercise would be completed by August. Meanwhile, 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 said. OSKs Yap said a shortage of rubber gloves could be expected in the first quarter of this year. This is because there have been constraints to new capacity expansion in Malaysia, as there was no new natural gas supply made available for the industry, he said. While using biomass to generate power was an alternative, it would take 12 to 15 months to get a biomass boiler ready for use, he said. Thus we expect new capacity to kick in only in the second half of 2010, said Yap.

Natural Rubber Price Increase - Reference list - April 2010

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 worlds largest producers of NRL, the commodity traded at over 637 sen/kg Fridayup about 6% from last month. Adding to the causes behind the increased rubber prices: - Production fell 11% from January-September 2009the biggest drop in more than 34 years 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 worlds 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 makers raw material costs, tyre manufacturers are going to have to increase prices in response, according to Deutsche Bank. Assuming 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. Thats 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$1.5/kg to US$3.0/kg (RSS3 grade). This increase will have a four to six months lag effect on tyre companies profit and lossSo far, we have no reason to be worried since end market volumes are recovering (especially on passenger car tyresinventories at dealers are low (sell in markets have been worse than sell out markets), 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 rubberbased products such as tyres and condoms. NR 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 term, the trader told Business Times in a phone interview. Kossan 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 slowdown. Rubber glove makers for example have been receiving good demand for their latex gloves despite the global economic slowdown. Now 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 tyres, Ong told Business Times. An industry player who declined to be named said the volatile political situation in Thailand which is the worlds largest NR producer will always be a concern for rubber producer and consumers alike thus lending strong support for NR prices. Further more, crude oil prices has also topped US$80 a barrel (RM273.60) which in turn has pushed up synthetic rubber prices. This will make NR more competitive. 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 times. Inventories 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 year, said the official.

Natural Rubber Price Increase - Reference list - April 2010