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[Geojit Comtrade] Daily report on Natural Rubber: March 4, 2013

MARKET COMMENTARY

In the week gone by, natural rubber prices were seen swinging as reports of possible hike in import duty flowed in. In the physical market, prices hit its highest in about a month, though prices remained trapped inside Rs.155-158 a kg ranges. Meanwhile, on NMCE, prices managed to recover from a two and a half year low, the momentum lacked fillip as the broad sentiments stayed weak. Steep plunges in the overseas market amidst weak fundamental in the domestic market kept market under pressure.

Natural rubber prices in the international market stayed on bearish mode. On Monday, TOCOM rubber futures reversed initial advances and declined over 0.5 per cent. SHFE and AFET rubber futures too dropped, extending the previous week’s losses. Lacklustre manufacturing data from China and sliding crude oil prices weighed on overall market sentiments. However, robust manufacturing and auto sales data from the US are likely to lent support.

MARKET NEWS

US auto sales rise nearly four per cent in February to 15.38 million vehicles.

Rubber inventories in the warehouses monitored by SHFE rose 0.9 per cent to 103299 tonnes.

India’s Commerce and Industry Minister Anand Sharma said that the Government will intervene to ensure that domestic rubber producers are not affected by price fluctuation, without elaborating measures to be taken.

AIRIA expresses concern on the move to increase import duty on natural rubber which would hit thousands of small units.

Tyre industry objects to the Centre’s move to raise the import duty on natural rubber from Rs 20 per kg to Rs 34 per kg. In view of the widening gap in domestic production and consumption, the industry says, the import of natural rubber is inevitable.

Thailand, Indonesia and Malaysia may extend shipment cuts if prices drop below $3 per kilogram when the program ends in March, Darmansyah Basyaruddin, chief executive officer at the International Rubber Consortium, told reporters at seminar in Jakarta last week.

India to raise import duty on natural rubber from present Rs.20 or 20 percent to Rs.34 or 20 per cent, which ever is lower.

TECHNICAL VIEW

RUBBER Apr NMCE

 Broad Trend: Bearish

Near Term: Requires clearing 16380-16500 ranges to lessen the prevailing bearish sentiment.

TURNAROUND

Resistances

LEVELS

Supports

16050/16150

16380-15600

15900/15750

16260/16380

15600-15500

16500/16650

15360/15200

 

Source: Geojit Comtrade

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