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[Geojit Comtrade] Daily report on Natural Rubber: April 23, 2013

MARKET COMMENTARY

Subdued demand continued to build pressure on natural rubber market to move south. On Monday, RSS4 in the spot market dipped further to hit six week low while on NMCE the grade lost about 1.5 per cent and were hovering near its weakest since mid-May 2010. According to the Rubber Board, natural rubber consumption by the tyre sector that constitutes more than 60 per cent of the total use hardly grew in the FY 2012-13. Meanwhile, due to unfavourable weather, tapping activity in the plantations is yet to gather pace after the lean production phase which is likely to lend support to declining prices. Rise in temperature with only sporadic summer rains is to have an impact on the yield. In the overseas market, a mixed trend is being witnessed on Tuesday. Prices are swinging between positive and negative turfs and the undercurrents stayed weak. Weak cues from Chinese manufacturing front added further woes over demand from the top consumer.

MARKET NEWS

2013-14 are projected at 960,000 tonnes and 10, 20,000 tonnes respectively with a deficit of 60,000 tonnes.

Immature rubber plants of two-four years are drying up in India’s north-eastern region owing to prolonged dry weather.

Rubber stockpiles at Qingdao, China’s largest hub for the tropical commodity, rose to a record 366,900 tons by April 15 according to the Qingdao International Rubber Exchange Market.

Thailand, the world’s biggest rubber producer and exporter, is planning to offer loans to exporters to buy the commodity in a bid to shore up falling prices.

Thailand and Malaysia will collaborate in setting up rubber industry zones on both sides of the common border in order to create jobs and income for citizens of both nations.

Rubber inventories in the warehouses monitored by SHFE rose 1.5 per cent 119149 tonnes the previous week. Meanwhile, crude rubber stockpiles held at Japanese warehouses fell 0.8 percent to 15,668 metric tons on April 10, according to data from the Rubber Trade Association of Japan.

TECHNICAL VIEW

Broad Trend: Seen weak.

Near Term: Even as trend stays weak, now requires clearing and sustaining 15250 to see further decline to 15150 or more to 14900 regions. Else, bounce back can be anticipated towards 15800-15900 levels.

TURNAROUND

Resistances

LEVELS

Supports

15650/15800

16250-15900-15250

15400/15260

15900/16100

15150/14900

16250/16400

14800/14650

 

Source: Geojit Comtrade

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