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[Geojit Comtrade] Daily report on Natural Rubber: June 21, 2013

MARKET COMMENTARY

Subsequent to its recent up run towards the strongest level in about seven months, RSS4 is seen pausing. On Thursday, the grade was seen trading sideways with a mild negative bias in the physical as well as futures market. Even as supply crunch in the market carries to lend support, increasing prospects of imports and slackening demand are likely to restrict gains. In the mean time, with Commodities Transaction Tax (CTT) to be imposed from July 01, natural rubber is absent from the list of agricultural commodities that has been exempted from CTT.

Natural rubber prices continue to stay bearish on worries over demand from the top consumer China. TOCOM rubber futures plunged to nine month low, shedding more than three per cent. SHFE followed the suit too. Sharp liquidation in equities as well as other commodities pondered upon the sentiments too.

MARKET NEWS

According to Thai deputy commerce minister, seven state agencies and private firms will jointly set up a rubber futures fund with an initial investment of Bt210 million to buy at least 42 billion tonnes of the agricultural commodity in July.

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

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

17350/17500

 17500-16850

 17180/17000

17650/17800

16950/16850

18000/18100

16600/16500

 

Source: Geojit Comtrade

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