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[Geojit Comtrade] Daily report on Natural Rubber: April 25, 2013

MARKET COMMENTARY

Even as the broad weakness stayed intact, RSS4 in the physical market ruled flat on Wednesday. Prices were hovering Rs.158 a kg, its weakest level in about two months on lacklustre buying interest and activities were subdued owing to holiday in futures market. NMCE remained closed yesterday on account of Mahavir Jayanti. In the mean time, natural rubber prices in the overseas market were seen rebounding from their recent lows. On TOCOM, the benchmark October rubber futures rose for the second successive day to its highest level in one week on Thursday, supported by broad weakness yen and rise in crude oil prices. However, the undercurrents stayed weak as production is likely to outstrip demand this year too amidst weak macro economic cues. Meanwhile, Thailand’s working group on natural rubber is to meet today to seek ways to stabilise natural rubber prices.

MARKET NEWS

TOCOM April rubber futures expired with 503 lots being delivered compared to 406 lots delivered the previous month.

Thailand, the world’s largest rubber producer, is working on plans to reduce supply and increase demand for natural rubber to stabilize prices, according to the government.

According to Rubber Board, production and consumption of NR in 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.

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: Bounce back seen after taking support at the lower trend line is likely to extent towards 15650 or more to 15800-15900 but requires clearing the same for further upsides. Now, further weakness is seen only on sustained trades below 15350.

TURNAROUND

Resistances

LEVELS

Supports

15650/15800

15900-15350

15350/15250

15900/16100

15150/14900

16250/16400

14800/14650

 

Source: Geojit Comtrade

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