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[Geojit Comtrade] Daily report on Natural Rubber: December 12, 2013

MARKET COMMENTARY

While the broad sentiments stays still weak, RSS4 grade rubber is probably on a consolidation mode, awaiting fresh triggers for further directional moves. On Wednesday, the grade trade firm near Rs.151 a kg while on NMCE, the benchmark January rubber futures were seen trading in thin ranges. In the meantime, latex (drc 60%) prices continued to edge higher.

On Thursday, natural rubber prices in the overseas market are seen rising buoyed by anticipation of robust demand from the top consumer China and high crude oil prices. TOCOM rubber futures rose to more than a two month high following upbeat economic indicators from China. However, investors are also waiting for cues of the US Federal Reserve’s moves to taper its massive asset purchase program.

MARKET NEWS

According to Office of the Rubber Replanting Aid Fund, Thailand to restart collecting fees on rubber shipments from January after a 4- month exemption.

Crude rubber stockpiles held at Japanese warehouses rose 30 percent to 9,320 metric tons on Nov. 20, according to data from the Rubber Trade Association of Japan.

Natural rubber imports by India in November declined 4.57 per cent to 22872 tonnes on year on year basis. Production dropped as well, by 7.1 per cent to 91000 during the same period.

China’s natural rubber imports surged to 270000 tonnes in November, a rise of 42 per cent on month on month basis and 25 per cent year on year.

Rubber inventories in the warehouses monitored by SHFE rose 7.2 per cent last week to 161896 tonnes.

In the meeting of the Executive Committee of Rubber Board, the members demand either a ban on natural rubber imports or temporary suspension of imports against advance licence. The Committee also suggested to raise the import duty to 25 per cent and urged the State and the Central Government to implement a scheme for joint procurement of rubber.

According to ANRPC, natural rubber output from the key growers rose 3.1 per cent during Jan-Nov period this year.

TECHNICAL VIEW

 RUBBER Jan NMCE

A consolidation is being witnessed currently. As long as 15200- 15100 ranges hold downside, pullbacks are likely. However, it requires clearing the resistance of 15650 for further upside and successful attempts to break 15950 could induce positive sentiments.

TURNAROUND

Resistances

LEVELS

 Supports

15530/15650

15950-15650-15200

15350/15200

15800/15950

15100/15000

16050/16150

14950/14800

 

Source: Geojit Comtrade

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