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[Geojit Comtrade] Daily report on Natural Rubber: December 24, 2013

MARKET COMMENTARY

Even as the positive sentiments remained intact, RSS4 in the Indian market took a breather on Monday following the sharp rise towards one month high. On NMCE, the benchmark January rubber futures eased from the five week highs while in the physical market the grade traded firm near more than a one month high. Import duty hike coupled with falling domestic natural rubber production provided concrete support. However, weakness in the overseas market weighed on. Also, some profit booking was likely to set in with market on the threshold of Christmas and New Year holidays.

On Tuesday, natural rubber prices are seen extending the previous day’s losses in the international market. TOCOM rubber futures reopened today after an extended weekend holiday and slipped more than two per cent. Worries over demand from the top consumer China and rising stockpiles weighed on.

MARKET NEWS

Crude rubber stockpiles held at Japanese warehouses rose 6.2 percent to 11553 tons on Dec.10, the highest level in six months, according to data from the Rubber Trade Association of Japan.

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.

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

While the positive trend is intact, 16500 pose to be the next hurdle and require clearing the same for a rise to 16650 or even more. On the other hand, once it break below 16250, lower corrective moves are likely to extend to 16150 or 16040 before bouncing back. Slippage past 15900 may induce weakness.

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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