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[Geojit Comtrade] Daily report on Natural Rubber: June 12, 2013

MARKET COMMENTARY

RSS 4 prices strengthened in the Indian market to hit a fresh six and a half month high on Tuesday. In the physical market quotes for the grade firmed up to Rs.175 a kg propped up by worries over availability amidst intensifying monsoon rains over the major natural rubber growing areas in Kerala. NMCE rubber futures gained as well, with the most active July rubber futures inching higher more than one per cent. In the meantime, natural rubber imports in May slumped 17 percent (YoY) on lower demand from the tyre sector. Consumption dropped as well during the same period while production inched up by 1.7 percent.

On Wednesday, TOCOM rubber futures tumbled, with the benchmark November rubber futures shedding more than four per cent. While worries over demand from China continue to bother markets, strengthening yen and weaker equities added further pressure. Meanwhile, the IRTC meeting starts today in Indonesia.

MARKET NEWS

Natural rubber production in India rose 1.7 per cent to 59000 tonnes in May while consumption dropped 3.1 per cent to 83000 tonnes. Imports slumped 17 per cent to 17334 tonnes.

Natural rubber imports by China fell to 180000 in May compared to 227320 tonnes imported the previous month.

According to China Association of Automobile Manufacturers, wholesale deliveries of cars, multipurpose and sport utility vehicles increased 9 percent to 1.4 million units in May compared to 13 per cent growth achieved during the previous month.

Rubber inventories in the warehouses monitored by SHFE rose 0.1 per cent to 114324 tonnes last week.

According to Rubber Trade Association of Japan, crude rubber inventories in the Japanese ports as of May 20 fell 756 tonnes to 14881 tonnes over a period of ten days.

According to ANRPC, natural rubber production from Indonesia is seen rising 5.0 per cent to 3.18 million tonnes while that of Malaysia is seen at 980000 tonnes, up 6.8 per cent this year.

Top three natural rubber producing countries, Thailand, Indonesia and Malaysia, to meet in Indonesia from June 12th to 14th to discuss measures to stabilise natural rubber prices.

TECHNICAL VIEW

 RUBBER July NMCE

While there exists positive bias, lower correction to 17100 or more to 17000 cannot be ruled out before resuming rising. However, such downside moves stretching beyond 16950 could induce weakness.

TURNAROUND

Resistances

LEVELS

 Supports

17400/17500

17500-17200-16850

17100-17000

17650/17800

16950/16850

18000-18100

16600/16500

UPCOMING RUBBER MARKET HOLIDAYS

DATE

EXCHANGE/COUNTRY

OCCATION

10-12Jun

SHFE

Dragon Boat Festival

01-Jul

Thailand

Mid Year Closing Day

15-Jul

TOCOM

Oceans Day

22-Jul

Thailand

Asarnha Bucha Day

05-07Aug

Indonesia

National Leave

07-09Aug

Malaysia

Hari Raya Aidilfitri *

8,9-Aug

Indonesia

Idul Fitri Festival

09-Aug

NMCE

Ramzan

12-Aug

Thailand

H.M. the Queen’s Birthday

15-Aug

NMCE

Independence Day

17-Aug

Indonesia

Independence Day

31-Aug

Malaysia

National Day

09-Sep

NMCE

Ganesh Chathurthi

Source: Geojit Comtrade

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