[Geofin Comtrade] Daily report on Natural Rubber: March 18, 2015

MARKET COMMENTARY

⊳Sentiments were muddled in the Indian natural rubber market on Tuesday. RSS4 grade rubber traded firm in the physical market while on NMCE, the commodity came under the hammer, with prices declining nearly two per cent. Underlying market fundamentals are weak though it is a lean production phase. Lackluster tyre sector demand, rising imports as well as falling crude oil prices continued to weigh on the overall market sentiments. A similar trend is being witnessed in the major overseas natural rubber markets too. On Wednesday, TOCOM rubber futures ticked up while SHFE and AFET rubber futures inched lower in thin trades as investors probably chose to stay on the sidelines ahead of the US FOMC monetary policy announcement, scheduled later tonight.

MARKET NEWS

⊳ Crude rubber inventories in the Japanese ports stood at 11904 tonnes as of March 10, down 3.0 per cent from the last date of inventory, (February 28) according to Rubber Trade Association of Japan.

⊳ In an attempt to tide over the prevailing crisis in the rubber sector, the Rubber Board, in co-operation with Rubber Producers Societies (RPS), self help groups, and other voluntary organisations will organise an awareness campaign to propagate the message of sustainable rubber cultivation in the heartlands of rubber.

⊳Southeast Asian countries expect to develop a rubber-trading floor for regional rubber-producing countries to actively fix export rubber prices on the world market, Vietnamese and Thai officials announced during talks.

⊳Kerala Budget allocates Rs.300 crore Rubber Price Stabilisation Fund to purchase 20000 tonnes and fixes support price for rubber at Rs.150 a kg.

⊳Union government considering raising import duty on natural rubber to 25 per cent from the present 20 per cent according to the Commerce minister.

⊳Thailand and China are expected to sign a contract in May for China to purchase 2 million tonnes of Thai rice and 200,000 tonnes of rubber, following further discussions between the countries.

⊳India’s natural rubber output fell 13.5% on year to 50,000 tn in February from 57,800 tn a year ago, according to data from the Rubber Board. Consumption in February was at 82,500 tn, up from 79,375 tn a year ago while imports in rose around 42% on-year to 28,806 tn.

⊳The Singapore Exchange (SGX) is in preliminary talks to be part of a Southeast Asian rubber exchange that would bring together the top three producing nations.

⊳The 2015 World Rubber Summit jointly organized by International Rubber Study Group and SingEx Exhibitions to be held in Singapore on March 24 and 25.

TECHNICAL COMMENTRY

RUBBER Mar NMCE

There exists considerable weakness with the break of 12480 downside and this momentum may continue towards 12200-12150 or even more. However, unanticipated rise above 12700 can see some short covering though strong buying bias is seen only over 13000.

Source: Geofin Comtrade