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[Geojit Comtrade] Daily report on Natural Rubber: June 13, 2013

MARKET COMMENTARY

Natural rubber prices traded firm in the Indian market as concerns over supplies gripped the market. With advent of Southwest monsoon in the major rubber growing state, Kerala, arrival to the market are seen on the lower side. In the physical market, RSS4 stayed strong near Rs.175 a kg, its highest level in about six and a half month. The most active July rubber futures on NMCE had tested its strongest level since mid-March before ending almost flat on Wednesday. However, bearish moves in the overseas market coupled with a fall in consumption are likely to keep gains under check. On Thursday, TOCOM rubber futures continued to glide down, slumping to nine month low dragged down by strengthening yen and weak equities. Meanwhile, tracking tumbling prices on TOCOM, SHFE rubber futures shed more than three per cent as the exchange reopened after Dragon Boat Festival holidays in China. Now, all eyes will be on the outcome of meeting of the top three natural rubber producers.

MARKET NEWS

According to Rubber Trade Association of Japan, crude rubber inventories in the Japanese ports as of May 31 fell to 14224 tonnes, down 654 tonnes over a period of ten days to its lowest level since March 10.

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 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 exist positive bias, unsuccessful attempts to clear the resistance at 17500 could call for lower corrective move towards 17170-17000 region. However, such moves may have potential to induce weakness once it breaks below the considerably strong support of 16850.

TURNAROUND

Resistances

LEVELS

 Supports

17400/17500

17500-16850

17170/17000

17650/17800

16950/16850

18000-18100

16600/16500

 

Source: Geojit Comtrade

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