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[Geojit Comtrade] Daily report on Natural Rubber: November 5, 2013

MARKET COMMENTARY

Natural rubber continues to remain in the strangle hold of bears. On Monday, RSS4 in the local market were hovering near its weakest level since late-April this year as on lack of robust buying interest from the major natural rubber consuming sector. In the futures segment, the grade on NMCE continued to trade range bound awaiting fresh cues for further directional moves. In the meantime, protests are intensifying in Kerala demanding government intervention to support the market.

A declining trend is being witnessed in the overseas market as well. On Tuesday, TOCOM rubber futures dropped to its weakest level since August this year weighed down by decline in crude oil prices as well as strengthening yen. SHFE and AFET rubber futures followed the suit.

MARKET NEWS

Demanding immediate steps to resolve the crisis which has affected the rubber industry in the state, the Kerala State Cooperative Rubber Marketing Federation (RubberMark) will hold a dharna to the Rubber Board office in Kottayam on November 5. On the same day, rubber traders across the state will close down their shops and observe a hartal in protest against the crisis in the industry.

Rubber inventories in the warehouses monitored by SHFE rose 4.4 per cent to 147,662 tonnes last week.

Reports says China bought around 54,000 mt of Ribbed Smoked Sheet grade natural rubber from local suppliers for government stockpiles.

Crude rubber stockpiles held at Japanese warehouses rose 21 percent to 5,314 tons on Oct. 20, according to data from the Rubber Trade Association of Japan.

According to Chinese media reports, the rubber industry has asked the National Development and Reform Commission to waive the 20 percent import tariff on rubber for tire manufacturing.

Bridgestone to increase output of passenger car radial tire at its plant in Wuxi by 5,300 tires/day, according to a statement to the Tokyo Stock Exchange.

TECHNICAL VIEW

 RUBBER Dec NMCE

Seen trading range bound inside 16500-15800 levels and requires a breakout from either the sides for further directional moves. Slippage past 15800 could incite another round of sharp liquidation.

TURNAROUND

Resistances

LEVELS

 Supports

16120/16250

16540-16280-15800

16000-15960

16400/16540

15800/15700

16750/16850

15550/15400

 

Source: Geojit Comtrade

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