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[Geojit Comtrade] Daily report on Natural Rubber: November 7, 2013

MARKET COMMENTARY

Continuing its downtrend, natural rubber prices slid further in the Indian markets on Wednesday. In the physical market, RSS4 grade rubber hit its weakest level since late-February as quantity buyers carried on to elude from the market. On NMCE, sell-off persisted and the most active December rubber futures made a fresh contract low. Despite the fall in output even as the peak production have begun, fall in consumption as well as burgeoning imports are exerting pressure on the prices to move south.

A mixed trend is being witnessed in the overseas natural rubber market on Thursday. TOCOM rubber futures took a breather from the recent declines and inched up ahead of key economic releases from the US. Rise in oil prices aided the sentiments too.

MARKET NEWS

Natural rubber imports by India in October shoot up 81 per cent to 33486 tonnes while production, consumption as well as exports dropped 7.3, 3.57 and 59 per cent respectively on a year on year basis.

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

Even as the broad trend still remains feeble, mild short covering may be seen towards 15800-15900 before resuming downtrend. And, on the lower side 15550 will pose as considerably good support level, which if breached could drag prices further lower to 15400-15350.

TURNAROUND

Resistances

LEVELS

 Supports

15800-15950

16250-15950-15550

15550/15400

16100/16250

15350/15150

16400-16540

14900/14750

 

Source: Geojit Comtrade

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