2012 SEP - LGM - Malaysian Rubber Board

Natural Rubber market review
September
The Kuala Lumpur market ruled steadier in
September as prices rose across the board due
to strong advices from the Tokyo rubber market.
Firmer regional markets and good demand from
consumers, coupled with stimulus action from
U.S.A. and China to bolster economy of their
respective countries, gave support to the prices.
Compared with levels on 30 August, the price of
SMR 20 was up by 80.5 sen/kg or 10.3% to close
at 863.50 sen/kg whilst latex concentrate closed
at 617.50 sen/kg, up 49.0 sen/kg or 8.6%. The
price movements of selected grades of rubber in
September are shown in Table 1.
During the first trading week, the market ruled
mixed in quiet conditions with thin trading
activities due to uncertainty about market
directions as well as investors waiting to see if the
European Central Bank announces new
measures to tackle the Eurozone debt crisis.
Although the market remained quiet from the
demand side, the Kuala Lumpur rubber market
witnessed the upward trend during the second
trading week in response to the positive news on
1
the implementation of Agreed Export Tonnage
Scheme (AETS) to stabilize the rubber prices in
the coming month. It was reported that major
buyers were sourcing their supply for near-month
shipments, as they were worried of the supply
shortage and stock withholding by the major
rubber producing countries. The upward trend
was also in line with higher opening of regional
futures market. The expectations of more
stimulus measures from the U.S. Federal
Reserve to boost the economy had also brought
in good sentiment to the market.
During the third trading week, the Kuala Lumpur
rubber market continued with its upward trend
following a positive response to a report that the
Thai government plans to spend an additional 30
billion baht to purchase rubber from farmers at
above-market rates. The approved budget for the
scheme may be used for six months, beginning
October 2012. At the same time, prices were also
in line with the uptrend in TOCOM resulting from
an increase in crude oil prices and the
expectations that the demand would rise after the
Bank of Japan eased monetary policy.
After the peak on 21 September, a technical
correction prevailed during the beginning of final
trading week due to profit-taking activities in the
Table 1: Prices of SMR CV, SMR 20 and Latex Concentrate, September 2012
Note: * Official price of latex concentrate in bulk, 60% DRC
Source: Malaysian Rubber Board
SMR CV SMR 20 Latex Concentrate
sen/kg RM/tonne sen/kg RM/tonne sen/kg RM/tonne
Highest 993.50 9,935.00 866.00 8,660.00 617.50 6,175.00
Lowest 940.50 9,405.00 781.50 7,815.00 558.00 5,580.00
Average 967.11 9,671.10 829.13 8,291.30 586.71 5,867.10
Change from the last
day of the previous
month
44.50 445.00
2012
SEP
80.50 805.00 49.00 490.00

sen/kg
950
900
850
800
750
700
650
600
550
500
450
1,410
1,350
1,290
1,230
1,170
1,110
1,050
990
930
870
810
750
690
630
570
510
450
sen/kg
MRB Daily Noon Prices, September 2012
SMR 20
Latex in Bulk
3 4 5 6 7 10 11 12 13 14 18 19 20 21 24 25 26 27 28
SMR 20 and Latex ( in Bulk,60% DRC) Noon Prices
2 October 2011 - 28 September 2012
SMR 20
Latex in Bulk
2
Oct '11 Nov Dec Jan '12 Feb Mar Apr May June July Aug Sep '12

ubber futures market. The sentiment was aided
by cautious from market players about global
economic growth despite steps from major central
banks to bolster their respective countries’
economy. However, towards the end of month,
prices recovered slightly in tandem with slight
rebound of regional prices, in response to the
support from the Thai Government's price
intervention measures in spot rubber trading and
stimulus action from U.S. and other major central
banks. The positive sentiment was further
triggered by news that China's central bank is
injecting 365 billion renminbi as an additional
monetary stimulus for the country’s economy.
Outlook
The implementation of AETS by Thailand,
Indonesia and Malaysia effective 1 October 2012
would give support to the market. However, the
uncertainty on the global economic growth and
the solution to the Eurozone debt crisis would
continue to put pressure on the rubber market.
With the positive sentiments outweighing the
negative ones, prices are expected to remain
steady in the near-term.
News Brief
Global August 2012 natural rubber production
up 1.4% on year –ANRPC
Global natural rubber output in August 2012 is
expected to grow 1.4% from a year ago, much
slower than the 8.3% growth rate posted in
August 2011, said the Association of Natural
Rubber Producing Countries (ANRPC) in its
monthly bulletin.
In October 2011, natural rubber output was 19%
higher on year. The ANRPC forecasts global
natural rubber production to hit 10.83 million
tonnes this year. This latest forecast is in line with
its last prediction in July.
- Dow Jones Commodities Service, 4 Sep
3
Vietnam to meet IRCo, date undetermined -
Officials
Vietnam is set to meet with the International
Rubber Consortium (IRCo) about joining the
alliance, but the date has not been set, officials in
Vietnam and the rubber group said.
IRCo has for years been trying to rope in Vietnam
into the group as it seeks to better control global
rubber prices, which have been volatile. But
Vietnam, the world's fourth largest exporter of
natural rubber is deterred by the cost of joining
the club.
According to the chief executive of International
Tripartite Rubber Council (ITRC), Darmansyah
Basyaruddin, as an emerging major producer of
natural rubber, Vietnam would reap significant
benefits from the alliance, as the country and
IRCo country members will be able to be pricemakers
and not price-takers. However, he added
that Vietnam will likely have to contribute millions
of dollars to join the group.
- Dow Jones Commodities Service, 4 Sep
Malaysian rubber sector set to get a boost
Malaysia's rubber sector is to get a boost with the
setting up of several facilities by the Government
to improve production quality.
Deputy Prime Minister, Tan Sri Muhyiddin Yassin,
said the Government through Malaysian Rubber
Board (MRB), had in its pipeline to set up these
facilities.
"The existence and operations of these facilities
will create a more conducive environment and
opportunities for the business community in the
rubber industry to generate investments and reinvestments,"
Muhyiddin said at the launch of 6th
International Rubber Glove Conference Exhibition
2012.
-New Straits Times, 5 Sep

MARGMA seeks tax breaks for glove makers
Malaysian Rubber Glove Manufacturers
Association (MARGMA) has appealed to the
Government to accord tax breaks for glove
makers who aggressively re-invest to automate
production lines and develop more innovative
gloves for use in the medical sector.
Its President, Lim Kwee Shyan, said that the
Government earlier this year drastically cut
approval permits for foreign workers. In view of
the difficulty in securing additional labour, Lim
said the association members are working
diligently to mechanise their manufacturing
processes.
He highlighted that the industry is making a
paradigm shift from being a labour-intensive to
that of a high technology and knowledge-based
sector, which attracts more mechanical engineers
and chemists.
-New Straits Times, 5 Sep
More R&D to stretch rubber industry further
Five new research and development facilities for
the rubber production sector are in the pipeline,
said Deputy Prime Minister, Tan Sri Muhyiddin
Yassin.
He added that this was part of the efforts under of
the Government’s Economic Transfor­mation
Plan (ETP) to promote the rubber industry,
especially in the production of rubber gloves, as a
key driver of the economy.
The Gross National Income contributed by the
rubber sector in 2020 is expected to rise to RM
52.9 billion, of which 56.7% or RM 30 billion will
be from the glove industry alone.
-The Star, 5 Sep
Vibrant Thai automotive industry shattering
performance records
Thailand's automotive industry is growing like
gangbusters in 2012, with makers left and right
shattering performance records. The country's
automobile production for January to June
reached 1.06 million units, marking robust growth
4
of 30.5% compared with the corresponding
period of last year.
Automotive sales in the domestic market zoomed
to a total of 606,523 vehicles in the first half, up a
whopping 40.4 % year-on-year, with many car
brands seeing first half of the year grew nearly
double. Exports shot up by 14% to 456,869 units.
Performance in June alone showed an especially
blistering pace. With all carmakers recovered
from last year's massive flooding, Thailand's
automobile output for June reached 205,600
units. This represented an all-time high for any
single month and a hefty 33.8% year-on-year
increase.
- Thai News Service, 5 Sep
Lanxess to invest EUR235M in synthetic
rubber plant in China
German chemicals company Lanxess said it will
build the world's largest plant for ethylene
propylene diene monomer, or EPDM synthetic
rubber, in Changzho, in China's Jiangsu
Province.
The company will spend 235 million Euro
(US$295 million), making it the largest investment
Lanxess has made in China to-date. The plant
will have a capacity of 160,000 metric tonnes per
year and is expected to begin production in 2015.
All necessary permits have been obtained from
the local authorities.
Global demand for EPDM is expected to increase
by more than four percent annually in the coming
years, while demand in China is expected to grow
by around eight percent, driven mostly by
automotive and construction industries..
- Dow Jones Chinese Financial Wire, 5 Sep
Glovemakers plan RM500m automation
Rubber glove manufacturers may invest up to
RM500 million to automate their operations in the
next 10 years, a move which could reduce the
sector's workforce by up to 50% during the
period, according to industry players.

Malaysian Rubber Glove Manufacturers
Association (MARGMA) president, Lim Kwee
Shyan, said that automation is crucial to mitigate
the impact of higher wages. This is in anticipation
of the implementation of the minimum wage,
effective next year.
"[An] employee is our asset," Lim told reporters
during the Sixth International Rubber Glove
Conference and Exhibition. He said that the local
industry currently comprises about 45 glove
manufacturers with a combined workforce of
some 60,000 workers. While the reduction in
manual labour by glove producers will mainly
involve unskilled workers, glovemakers are
expected to employ more skilled manpower in the
future.
-The Edge Financial Daily, 5 Sep
Indonesia fully committed to rubber-export
cut
Indonesia is fully committed to reducing
shipments by 100,000 metric tonnes in the fourth
quarter as agreed with the other two top growers,
Thailand and Malaysia, an industry group said.
Indonesian exporters and government officials
will discuss ways to implement the reduction next
week, said Daud Husni Bastari, Chairman of the
Rubber Association of Indonesia (GAPKINDO).
“We will set a proper and strict mechanism to
ensure that the export cut reaches its target,”
Bastari, who was elected as the group’s chairman
said. “The trade and agriculture ministry will issue
the guidance and monitor the implementation.”
-The Star, 7 Sep
Malaysia & Thailand to study 'Rubber City' plan
Malaysia and Thailand are looking at the
possibility of developing a large-scale rubber and
rubber industry-based development on the Kedah
-Thai border to stabilize falling rubber prices.
Prime Minister, Datuk Seri Najib Razak discussed
the plan with his Thai counterpart, Yingluck
Shinawatra, on the sidelines of the Asia-Pacific
Economic Cooperation (APEC) Leaders Summit
in Vladivostok, Russia.
5
Datuk Seri Najib told reporters that Malaysia had
appointed former Prime Minister, Tun Dr.
Mahathir Mohamad to lead a study on the
"Rubber City" joint plan while Yingluck said the
project would help bring stability to the nation's
restive south.
-New Straits Times, 9 Sep
USA remains the largest buyer of Indonesian
rubber
The United States is still the largest buyer of
Indonesian rubber, followed by Japan and China.
The Association of Indonesian Businessmen
(APINDO) said that Indonesia`s exports of natural
rubber to the United States reached 177,000
tonnes worth US$628.59 million in the first four
months of the year.
Exports to Japan totalled 131,000 tonnes valued
at US$4677 million, while those to China totalled
129,000 tonnes valued at US$466 million,
chairman of North Sumatra Apindo, Parlindungan
Purba, said.
-ANTARA, 11 Sep
Chinese economy likely to further stabilize
State Council Premier, Wen Jiabao said that the
Chinese economy sees a good development
environment as indicated by various macroeconomic
indicators, adding that it is likely to
further stabilize. He noted China's economic
growth is still kept at a level within expectations.
China is going to leverage on the relatively big
room for making use of fiscal and monetary
policies, huge domestic demand potential and
eagerness of various regions and departments. It
holds on to the conviction that stabilizing growth
should be taken even more importantly.
- AAStocks Financial News, 12 Sep

Sri Lanka moves to upgrade rubber
infrastructure to play 2022's US$ 4 billion
target
As global rubber prices are set to soar, Sri Lanka
is moving to upgrade its rubber sector to
capitalize on the trend-and also to play the US$ 4
billion rubber exports target set for 2022.
"I am pleased to announce that we are launching
the first ever national rubber industry survey. We
are also now looking at creating high-end rubber
testing laboratory facilities that the industry
needs. All of this will contribute to Rubber
Masterplan which looks to generate US$ 4 billion
rubber exports by 2022" announced Rishad
Bathiudeen, Minister of Industry and Commerce
of Sri Lanka.
- Asian Tribune, 16 Sep
Thailand: 30 billion baht more to shore up
rubber prices
The Thai Government plans to spend an
additional 30 billion baht to purchase rubber from
farmers at above-market rates to shore up prices,
the Bangkok Post reports.
Deputy Agriculture Minister, Natthawut Saikua
said that the Thai Government may also provide
up to 15 billion baht in soft loans to exporters with
the aim of buying up to 300,000 tonnes of rubber
to keep in the government's stockpile.
The budget approved on 13 September 2012 by
the National Rubber Policy Committee may be
spent from 1 October 2012 until 31 March 2013.
- Thai News Service, 17 Sep
Demand for natural rubber growing: ANRPC
Global opportunities for the production of natural
rubber and the demand growth are encouraging
in view of the improvement in the economic
indicators of the US, China, Japan and Europe,
said Dato’ Dr. Kamarul Baharain Basir, Secretary-
General of the Association of Natural Rubber
Producing Countries (ANRPC).
He was inaugurating the India Rubber Summit
and Dinner 2012 (IRSD 2012), held in Kochi on
15 September 2012. He predicted that there
6
would be a 4.7% rise in natural rubber supply to
10.83 million tonnes in 2012 while the
consumption would rise by 4.8% to 11.59 million
tonnes. "Of this, China would consume 3.67
million tonnes and India one million tonnes," he
noted.
-The Times of India, 21 Sep
RISDA looks forward to expand to Myanmar,
Laos
The Rubber Industry Smallholders Development
Authority (RISDA) intends to expand its
investment by developing rubber plantations in
Myanmar and Laos.
Its chairman, Tan Sri Rahim Tamby Chik, said
that the two countries were chosen as they have
ample landbank with the potential to be
developed into rubber plantation or undertake
rubber replanting programmes.
“The investment will involve supply of technology
and sharing experience as well as disclosure of
RISDA’s rubber industry planting and replanting
activities, which has reached 40 years in the
country,” he told reporters after launching the
state level “Kasihi Pekebun Kecil” programme.
-The Sun, 25 Sep

June 2012 p
Canada
0.5%
Brazil
2.4%
June 2012 p
Thailand
65.0%
Note: P = provisional
Others
6.8%
China
40.3%
Others
23.4%
Malaysia’s NR imports by countries July 2012 p
Indonesia
2.4%
Total: 62,035 tonnes
Malaysia’s NR exports by countries July 2012 p
Total: 60,131 tonnes
7
Vietnam
17.9%
USA
4.2%
Turkey
1.8%
Cambodia
3.1%
Philippines
4.3%
India
0.3%
Myanmar
0.2%
Total: 75,981 tonnes
Taiwan
2.1%
France
1.5%
Germany
12.4%
Iran
6.7%
South Korea
4.7%
Total: 62,723 tonnes
Source: Department of Statistics (DOS)

June 2012 p
Others
0.5%
June 2012 p
Latex
4.2%
Note: P = provisional
RSS
0.2%
SMR
95.3%
Malaysia’s NR exports by types July 2012 p
Total: 60,131 tonnes
Malaysia’s NR consumption by sectors July 2012 p
Gloves
68.6%
SMR
95.1%
Total: 35,810 tonnes
8
Others
0.4%
Other products
12.5%
Latex
4.2%
RSS
0.2%
Total: 62,723 tonnes
Total: 37,614 tonnes
Source: Department of Statistics (DOS)
Published by the Malaysian Rubber Board, 148 Jalan Ampang, 50450 Kuala Lumpur, Malaysia.
Tel: 603-9206 2000 Fax: 603-2161 6586
Tyres & Tubes
7.3%
Rubber thread
8.5%
Rubber Compound
3.2%