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[Geojit Comtrade] Daily report on Natural Rubber: February 22, 2013

MARKET COMMENTARY

Indian natural rubber market which was already reeling under pressure due to muted demand and fall in consumption, steep declines in the overseas market triggered a sell-off. While the activities in the physical market were paralysed owing to 48-hour nationwide strike on Wednesday and Thursday, in the futures market prices slumped to its weakest in around two and a half years. NMCE rubber futures glided down tracking vertical fall in the major overseas natural rubber market lessening the gap between the local and international prices considerably.

Natural rubber prices in the international market are seen steadying on Friday after sliding down continuously for the past few sessions. TOCOM rubber futures pared initial losses while SHFE rubber futures inched up though the sentiments stayed weak. Thailand’s decision to not to renew the rubber-buying program after it expires this March and the US Fed meeting minutes continue to play spoil sport for price advances.

MARKET NEWS

The Thai government will not renew its rubber-buying scheme, which is due to expire at the end of March, as prices have rebounded, according to the Deputy Agriculture Minister.

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.

TECHNICAL VIEW

 RUBBER Mar NMCE

 Broad Trend: Bearish

Near Term: Mild pullback towards 15500-15700 ranges may be seen. Yet, requires clearing the stiff obstacle placed at 15950-16050 ranges for further upsides.

TURNAROUND

Resistances

LEVELS

Supports

15500/15700

15960-15100

15200-15100

15850/15960

14900/14750

16050/16250

 14500-14400

 

Source: Geojit Comtrade

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