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[Geojit Comtrade] Daily report on Natural Rubber: December 27, 2012


As markets reopened on Wednesday after the Christmas holiday, RSS4 in the local market bounced-off from more than a two and a half year low hit earlier. Quotes for the grade inched up to Rs.160 a kg from around Rs.157.50 per kg quoted last weekend tracking gains in the NMCE and in the major overseas natural rubber market. NMCE rubber futures were seen trading in thin ranges following a gap-up opening. However, the activities in the market remained subdued and there were no major enquires from the tyre sector.

On Thursday, natural rubber prices are seen extending its earlier gains. The benchmark June rubber futures in TOCOM exchange climbed to a seven and a half month high. Prices breached 300 yen mark for the first time since May supported by a weaker yen and on expectations over further monetary easing by Japan. Also, forecast indicating lower production from Indonesia, second largest natural rubber producer, too lifted the sentiments. Meanwhile in SHFE, May rubber futures rose over three per cent to touch a seven month high.


Rubber output in Indonesia, the largest grower after Thailand, may decline for the first time in four years in 2013 as the country limits output and shipments in coordination with other producers to support a rally. Production may decline 8.9 percent to 2.77 million metric tons from an estimated 3.04 million tons this year, according to Agriculture Minister Suswono.

The rubber industry has sought lower import duty on raw materials such as butyl rubber and hi-tech synthetic rubbers, while it wants the duty on finished products to be kept high. A pre-Budget plea by the AIRIA, has asked for reduction in customs duty on natural rubber (NR) from the current 20 per cent or Rs 20 a kg to 7.5 per cent or Rs 10 a kg, whichever is lower.

According to Vietnam’s Ministry of Agriculture and Rural Development, 2012 rubber exports are seen at 1.02 million tonnes, up 25 per cent from an year earlier.

The Automotive Tyre Manufacturers Association has opposed imposing import curbs on natural rubber, saying that it will be counter productive.



With prices breaking above the resistance of 16200 in the previous session, prices are likely to continue to inch higher possibly towards 16400-16500 levels initially and require sustaining the same for further upsides. Inability to clear 16500 or a direct fall below 16040 may see prices extending the weakness. However, now, major bearish moves will be seen below 15700.

Source: Geojit Comtrade

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