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[Geojit Comtrade] Daily report on Natural Rubber: March 8, 2013

MARKET COMMENTARY

Sentiments were on the greener side in the local natural rubber market. Quotes for RSS4 in the physical market stepped up to its highest since mid-January this year bolstered by expectations of import duty hike and decline in natural rubber output as markets are in the midst of a lean production phase. NMCE rubber futures inched up about 0.7 per cent, reversing the previous session losses. Latex (drc 60%) prices inched up as well. Still, falling consumption are likely to keep a lid on gains.

TOCOM and AFET rubber futures are seen rising on Friday while on SHFE, natural rubber stayed in negative territory. Concerns over supply due to dry season in top natural rubber producing countries, Thailand and Malaysia provided firm support to prices. Weak yen lent further propped up prices. However, burgeoning stockpiles in China and decline in natural rubber imports by China are likely to limit gains.

MARKET NEWS

Natural rubber imports by China plunge 40 per cent in February to 150000 tonnes on month on month basis.

India’s natural rubber output fell five per cent to 61000 in February. Imports and consumption declined as well. Consumption dropped by nine per cent while imports slumped a whopping 61 per cent during the same period.

Both tyre and non-tyre manufacturers find that the government’s proposed 70 per cent duty hike on import of natural rubber will harm the domestic manufacturing sector, and give competitive advantage to importers of finished goods from China.

Ivory Coast’s natural rubber exports rises two per cent in January to 20831 tonnes on YoY basis.

According to ANRPC, natural rubber imports by China jumped 17.6 per cent to 482000 tonnes in the first two months. The country’s consumption is seen rising nine per cent this year to 4.18 million tonnes according to the organisation.

Kerala Chief Minister Oommen Chandy pressed for increase in import duty on rubber to protect the interest of domestic players during his meeting with Commerce and Industry Minister Anand Sharma.

TECHNICAL VIEW

 RUBBER Apr NMCE

Broad Trend: Bearish

Near Term: Requires clearing stiff resistance of 16380-16500 ranges to continue the present buying momentum. Unsuccessful moves to breach the same may call for a lower correction possibly towards 16140/15900 or more.

 TURNAROUND

Resistances

LEVELS

Supports

16380/16500

 16380-15600

16140/16040

16650/16740

15900/15750

16850/16950

15600/15500

 

Source: Geojit Comtrade

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