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[Geojit Comtrade] Daily report on Natural Rubber: June 20, 2013

MARKET COMMENTARY

RSS4 traded flat in the local natural rubber market on Wednesday. In the spot market as well as on NMCE, the grade was little changed as investors await fresh triggers for further directional moves. In the mean time, latex (drc 60%) prices continued to rise. While, limited supplies continued to provide firm support, concerns over demand following lower international natural rubber prices and weak macro-economic cues pondered on. Natural rubber prices in the overseas market on Thursday were bound south as concerns over demand intensified after Chinese manufacturing PMI dropped to its weakest level since last September that strengthened the view that the second largest economy and the top consumer of natural rubber is slowing down. TOCOM rubber futures erased initial gains while SHFE and AFET rubber futures dropped over one per cent.

MARKET NEWS

China HSBC Flash manufacturing PMI contracts in June to 48.3 from the May reading of 49.2.

Thai govt through state-owned Rubber Estate Organization and exporters plan to set up a fund to trade rubber on the Agricultural Futures Exchange of Thailand, or AFET, according to the farm ministry.

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.

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.

TECHNICAL VIEW

 RUBBER July NMCE

While sideways movement is being witnessed, as long as 17500 regions remains undisturbed upside, lower corrective moves towards 17180 or more to 17000-16950 ranges seems possible.

TURNAROUND

Resistances

LEVELS

 Supports

17500/17650

 17500-16850

17180/17000

17800/18000

16950/16850

18100/18300

 16600/16500

 

Source: Geojit Comtrade

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