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

MARKET COMMENTARY

RSS4 remained under pressure in the Indian market on Wednesday. NMCE rubber futures inched lower, stretching the previous session losses while in the physical market, the grade dipped again to its weakest level in more than three and a half years. Selling pressure persisted following the unfavourable decision from the Finance Ministry on raising the import duty on commodity. Also, panic gripped the market in anticipation of further decline in prices. In the mean time, latex (drc60%) is seen rising.

A mixed trend in being witnessed in the overseas natural rubber market on Thursday. While SHFE rubber futures dipped, TOCOM rubber futures traded rather flat after hitting a two month high earlier today. Speculation that China may step up rubber purchases for its state reserve and rise in crude oil price buoyed prices though strengthening yen weighed on.

MARKET NEWS

In response to the demand raised by Kerala to hike import duty on natural rubber, the Finance Minister raised doubts regarding feasibility of raising the import duty when natural rubber prices have increased in the international market though assured that the request will be looked upon.

Indonesia’s main rubber grouping has called on the world’s second largest producer to cut output next year by 10 percent and urged other Southeast Asia rubber-growing countries to do the same to reduce global stocks and support prices.

Crude rubber stockpiles held at Japanese warehouses rose 15.3 percent to 6,569 metric tons on Nov. 10, according to data from the Rubber Trade Association of Japan.

According to a report from Economic Intelligence Unit, global natural rubber surplus may reach 134,000 metric tons this year, 200,000 tons next year and 257,000 tons in 2015.

Malaysia’s production of natural rubber in September declined 1.3 per cent to 71,921 tonnes year-on-year, but exports increased 32.3% to 79,808 tonnes compared to September of 2012 according to its the Department of Statistics.

TECHNICAL VIEW

 RUBBER Jan NMCE

Even as there exist weakness, it requires clearing support at 15200- 15100 ranges to continue the sell-offs. Else range bound trades inside 15100-15650 may be seen. Now, it is mandatory to break and sustain above 15950 to revive some positive sentiments.

TURNAROUND

Resistances

LEVELS

 Supports

15560/15650

15950-15500

15350/15200

15800/15950

15100/15000

16050/16150

14950/14800

Source: Geojit Comtrade

Download this report (full content – PDF file) bellow:

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