MARKET COMMENTARY
Firmer SHFE rubber futures and slide in Japanese yen bolstered TOCOM rubber futures as the exchange reopened on Thursday after Labour Thanksgiving Day holiday yesterday. The most active April rubber futures on the bourse jumped over four per cent, to touch its strongest level since June 2015. Firmer crude oil too aided the sentiments.
In the local market on Wednesday, the trend was mixed. NMCE rubber futures bounced back while RSS4 in the physical market edged down from near- three month highs. Subdued demand continues to keep gains under check though upbeat cues from the major overseas natural rubber market lent robust support.
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The Rubber Board informed that production of natural rubber (NR) in the country showed an increase during the period from April 2016 to October 2016. It has recorded an increase of 10.94 per cent as compared to the production in the same period during the last year. Production during the month of October 2016 alone shows an increase of 15.4 per cent as compared to last year. If this trend continues, production of NR during the fiscal will reach the anticipated 6.54 lakh tonne.
The Shanghai Futures Exchange said on Tuesday it will raise margins and trading limits on futures contracts including copper, aluminium, zinc, lead, nickel, tin, rebar, hot rolled coil, rubber and bitumen effective from Nov. 24. It will raise margin requirements to 9 percent from 8 percent and the trading limit to 7 percent from 6 percent, the exchange said in a notice posted on its website.
Based on figures covering the period up to October 2016, total supply of natural rubber from ANRPC member countries is expected to post a near-zero growth (0.4%) during 2016.
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