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[Geojit Comtrade] Daily report on Natural Rubber: March 12, 2013

MARKET COMMENTARY

The trend was mixed in the local natural rubber market on Monday. RSS4 in the physical market held firm near its two month high while NMCE rubber futures took a pause from the recent rise and inched down nearly one per cent. A weak closing in the major international rubber futures coupled with weak auto sales data probably pressurized prices. Also influencing the sentiments are falling consumption, high stockpiles in the warehouses and lessening gap between natural rubber prices in the local and overseas market. Still, lean production phase and anticipation on hike in import may lend lower level support.

Natural rubber price is seen retreating in the international market on Tuesday on demand concerns. Decline in car sales in China amidst rising stockpiles in China and Japan dragged prices down. TOCOM rubber futures declined for the first time in six days, shedding over two per cent.

MARKET NEWS

Indian car sales plunges to a 12 year low in February, falling about 26 per cent. Two wheeler and commercial vehicles sales drop too.

Total vehicle sales in China fell 14 percent from a year earlier to 1.35 million units in February according to the China Association of Automobile Manufacturers.

Rubber inventories in the warehouses monitored by SHFE rose four per cent to 107481 tonnes in the previous week.

Crude rubber stockpiles held at Japanese warehouses rose 3.8 percent to 11,363 metric tons on Feb. 28, according to data from the Rubber Trade Association of Japan.

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.

TECHNICAL VIEW

 RUBBER Apr NMCE

 Broad Trend: Weak

Near Term: Prices require clearing the congestion range of 16850- 17050 to continue the positive momentum. Slippage past 16100 could induce weakness again in the near term.

TURNAROUND

Resistances

LEVELS

Supports

16700/16850

 17050-16100

16380/16250

16950/17050

 16140/16040

17200/17500

15900/15750

 

Source: Geojit Comtrade

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