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[Geojit Comtrade] Daily report on Natural Rubber: May 6, 2013

MARKET COMMENTARY

 ⊳ Recuperating from the weakest level since early March, natural rubber prices rose for the second successive week. On NMCE, the benchmark June rubber futures, registered a weekly gain of over four percent to hit a four week high. In the physical market too, RSS4 was seen advancing towards the close of the week catalysed by a recovery seen in the overseas market amidst limited arrivals in the local market and sporadic buying by the tyre sector. In the mean time, natural rubber in the overseas market is seen rising as the week’s trading session commences. SHFE rubber futures stretched the previous session advances tracking gains in equities and other commodities on robust employment data from the US. However, holiday in trendsetting TOCOM and Thailand may keep the activities on the lower side.

MARKET NEWS

 ⊳ Rubber inventories in the warehouses monitored by SHFE rose 0.2 per cent to 122137 tonnes.

⊳ Thailand, the world’s biggest rubber producer and exporter, is considering discontinuing measures curbing rubber exports upon their expiry on May 31 as they have failed to lift prices, a senior government official said on last Friday.

⊳ Thai govt. sees the nation’s natural rubber production rising by 5.2 per cent to 3.86 million tonnes in 2013 compared to 3.67 million tonnes produced last year.

⊳ The Thai government has no immediate plan to sell rubber from stockpiles as it will push prices of the commodity lower according to deputy farm minister Yuttapong Charasathien.

⊳ Crude rubber stockpiles held at Japanese warehouses rose 2 percent to 15,976 metric tons on April 20, according to data from the Rubber Trade Association of Japan.

⊳ Yokohama Rubber Co. announced plans to build a new plant to manufacture tires for trucks and buses in the United States and will have an annual production capacity of 1 million tires.

⊳ According to Union Commerce and Industry Minister Anand Sharma, import duty on natural rubber was to be hiked soon though the Minister of State for Finance in a written reply in Lok Sabha ruled out a hike for now.

TECHNICAL VIEW

RUBBER June NMCE

 Broad Trend: Seen weak.

Near Term: While positive bias remains, prices require clearing the congestion range of 16800-17040 to continue the upward momentum. Unsuccessful attempts to break past the same could see a lower correction towards 16400 or more to 16200 ranges.

TURNAROUND

Resistances

LEVELS

Supports

16800/16960

17050-16800-16400

16580/16430

17050/17250

16200/16050

17400/17560

15900/15800

 

Source: Geojit Comtrade

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