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[Geojit Comtrade] Daily report on Natural Rubber: March 13, 2013

MARKET COMMENTARY

Natural rubber price in the Indian market was under pressure following sharp plunges in the overseas market. RSS4 in the physical market and on NMCE edged down on Tuesday tracking a slide in trendsetting TOCOM and SHFE exchanges. High stockpiles and sluggish auto sales in the country hurt the sentiments too. In the physical market, prices were off its two month high hit the previous week while the most active April rubber futures retreated about two per cent after testing its highest level in seven weeks. However, the fall witnessed in the local market was relatively limited to that in the overseas market owing to the prospects of import duty hike.

Burgeoning stockpiles in China and Japan continued to pound natural rubber prices. On Wednesday, TOCOM and SHFE rubber futures stretched losses while on AFET, RSS3 took a pause from the previous session slump.

MARKET NEWS

Thailand’s Rubber Estate Organization spent 19.4b baht to buy 194,028 tons of rubber sheet from farmer cooperatives, said Pakdihan Himathongkam, a deputy government spokesman, without giving a time frame.

Malaysia’s natural rubber (NR) production rose by 15.3 per cent to 87,957 tonnes in January from December last year, according to the Statistics Department.

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.

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.

TECHNICAL VIEW

 RUBBER Apr Broad Trend: Weak

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

TURNAROUND

Resistances

LEVELS

Supports

16500/16700

 17050-16100

16250/16140

16850/16950

16040/15900

17050/17200

15750/15600

 

Source: Geojit Comtrade

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