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[Geojit Comtrade] Daily report on Natural Rubber: December 23, 2013

MARKET COMMENTARY

Bolstered by reports of import duty hike, natural rubber prices in the Indian market rallied to more than a one month high. In the physical market, RSS4 climbed to Rs.158 a kg towards the close of the week after the Union government raised the import duty on natural rubber 20 per cent or Rs.30, whichever is lower from the existing 20 per cent or Rs.20, whichever is lower. On NMCE, the benchmark January rubber futures jumped to a five week high, posting a weekly gain of more than five per cent. Quotes for the grade had dwindled to 44-month low earlier this month pressurized by surging imports and lacklustre demand from the tyre sector.

On Monday, natural rubber prices in the overseas market are on negative turf. TOCOM exchange remained closed on account of the Emperor’s Birthday. SHFE and AFET rubber futures declined with the benchmark May rubber futures on SHFE falling over two per cent. Concerns over demand from the top consumer weighed on the sentiments.

MARKET NEWS

India raises import duty on natural rubber 20 per cent or Rs.30, whichever is lower from the existing 20 per cent or Rs.20, whichever is lower.

Rubber inventories in the warehouses monitored by SHFE rose 0.8 per cent last week to 167141 tonnes.

Rubber inventories in Qingdao, China’s main hub for the commodity, advanced for a third week to 282,700 tons from 276,300 tons at the end of November, according to the Qingdao International Rubber Exchange.

Crude rubber stockpiles held at Japanese warehouses rose 16.7 percent to 10,875 tons on Nov. 30, the highest level since July 10, according to data from the Rubber Trade Association of Japan.

According to a report appeared on Bloomberg, China, the largest rubber consumer, bought 87,200 metric tons for government stockpiles

Bridgestone to invest $63 million to expand tyre manufacturing unit in Brazil. Increased production expected to start in May 2015 and the company is to produce additional 2,100/day passenger car radial tires and light truck radial tires.

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.

TECHNICAL VIEW

 RUBBER Jan NMCE

Break above the stiff resistance of 15950 have induced positive momentum. Now, 16500 poses to be the next hurdle, which if cleared would call for a 16650 or even more. However, a mild profit booking could also be anticipated towards 16250/16150 levels before resuming uptrend.

TURNAROUND

Resistances

LEVELS

 Supports

16500/16650

16500-16150-15900

16250/16150

16700/16850

16040/15900

16960/17050

15800-15700

 

Source: Geojit Comtrade

Download this report (full content – PDF file) here

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