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[Geojit Comtrade] Daily report on Natural Rubber: February 19, 2013

MARKET COMMENTARY

Amidst broad weakness, natural rubber prices in the Indian market carried on to consolidate with negative bias. Latex (drc 60%) prices slipped below Rs.100 a kg while RSS4 grade remained trapped in thin ranges awaiting fresh cues for further directional moves. Physical prices are hovering near its 34-month low weighed down by muted demand and decline in consumption amidst rising stockpiles in the warehouses. However, higher prices in the overseas market have been providing firm support to prices. Also, with markets about to enter a lean production phase, losses may be limited.

Natural rubber prices are seen declining in the overseas market on Tuesday pressured by concerns over demand from the top natural rubber consumer China. SHFE and AFET rubber futures stretched its previous session losses while TOCOM rubber futures declined towards the two week low. Steadying yen and dip in crude oil prices weighed on the sentiments too.

MARKET NEWS

According to China Association of Automobile Manufacturers, the country’s vehicle sales jumped 46.4 per cent on year on year basis.

Thailand has spent 22 billion baht buying 198,000 tons from farmers above market rates to boost local prices, according to Yuttapong Charasathien, deputy farm minister.

According to the Society of Indian Automobile Manufacturers India’s car sales and commercial vehicles sales dropped by 12.44 and 9.51 percent respectively in January.

According to Rubber Board, India’s natural rubber production declined by 5 per cent to 97,000 tonnes in January, while consumption fell by 9 per cent to 75,000 tonnes.

Rubber inventories in the warehouses monitored by SHFE rose 1.2% to 100015 tonnes.

Natural rubber imports by China rose 19 per cent in January to 250000 tonnes on MoM basis.

According to Rubber Board, India’s synthetic rubber consumption rose by 17 per cent to 36,710 tonnes in October last year while the production rose by 5 per cent to 9,006 tonnes during the period.

TECHNICAL VIEW

 RUBBER Mar NMCE

Broad Trend: Bearish

Near Term: As long as 16250 caps upside, prices may succumb to higher level selling and slippage past 15500 would strengthen the prevailing bearish trend.

TURNAROUND

Resistances

LEVELS

Supports

16950/16050

16250-15500

15800/15650

16250/16400

15500/15380

16540/16700

15260/15100

 

Source: Geojit Comtrade

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