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[Geojit Comtrade] Daily report on Natural Rubber: April 26, 2013

MARKET COMMENTARY

Firming natural rubber prices in the overseas market coupled with concerns over supplies on unfavourable weather improved the market sentiments. On Thursday, RSS4 in the physical market rebounded from its weakest level in about two months while on NMCE the grade rose on short covering, with the most active May rubber futures culminating the session 2.77 per cent higher. Even as the sentiments are likely to stay on the greener side the broad trend is still inclined towards a weaker side with consumption by the tyre sector hardly growing and imports as well as carry over stocks remaining high.

Natural rubber is seen stretching gains the previous session gains in the overseas market as the week session concludes. TOCOM rubber futures rose to two week high buoyed by advances in crude oil and other industrial commodities. However, consecutive holidays in Japan and China next week is likely keep activities subdued.

MARKET NEWS

According to Indonesian Rubber Association, natural rubber output during 2013 may decline to 3.0 million tonnes from the earlier estimates of 3.2 million tonnes due to wet weather.

According to General Statistics Office, Vietnam’s shipped 50000 tonnes of rubber in March and exports are seen falling by 5.7 per cent to 50000 in April on YoY basis.

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.

TECHNICAL VIEW

 Broad Trend: Seen weak.

Near Term: Bounce back witnessed in the previous session is likely to stretch towards 16100 or more to 16250 if prices manage to sustain above 15900. Else, a lower correction could be witnessed towards15750-15600 levels. Major weakness is seen below 15350.

TURNAROUND

Resistances

LEVELS

Supports

15900/16100

16250-15900-15350

15750/15600

16250/16400

15480/15350

16620/16750

15250/15150

 

Source: Geojit Comtrade

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