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[Geojit Comtrade] Daily report on Natural Rubber: January 15, 2014

MARKET COMMENTARY

Natural rubber prices in the Indian market remained under pressure. In the physical market, RSS4 grade rubber had dropped to its weakest level in about a month. Muted buying interest from the major rubber consuming sectors and weak cues from the overseas market weighed on the overall market sentiments. NMCE exchange remained closed on Tuesday on account Uttarayan/Id-E-Milad. In the previous day, mild short covering rallies were witnessed on NMCE though the underlying broad trend stayed on the weaker side.

Natural rubber prices in the overseas market took a breather after the recent sharp plunges. On Wednesday, TOCOM rubber futures were seen rising from the five month low, reversing the previous day’s losses, buoyed by a weaker yen. However, burgeoning inventories in China weighed on.

MARKET NEWS

Rubber inventories in the warehouses monitored by SHFE rose 8.0 per cent to 190158 tonnes last week.

China imported 350,000 tonnes of rubber in December, up 66.7 percent on the same month a year ago.

Crude rubber inventories at Japanese ports rose 5.0 percent from 11 days earlier to a 6-1/2-month high of 12,560 tonnes as of Dec. 31, data from the Rubber Trade Association of Japan showed.

According to Thai Office of Agricultural Economics, rubber production in Thailand may rise 4.3 per cent in 2014 to 4.03million tonnes.

Annual car sales in India declined for the first time in 11 years in 2013, posting a 9.59 percent fall, according to SIAM.

Natural rubber imports by India in December jumps 46 per cent to 26853 tonnes year on. Production falls 5.3 per cent to 108000 tonnes while consumption rose about 1.4 per cent to 79500 tonnes during the same period.

Natural-rubber output from growers representing 93 per cent of global production estimated to expand to 11.15 mln tons in 2013 on growth in Thailand, Indonesia and China, according to Association of Natural Rubber Producing Countries. Output in Vietnam estimated to jump 21 per cent to 1.04 mln tons in 2013, overtaking Malaysia as the third-largest producer.

TECHNICAL VIEW

 RUBBER Feb NMCE

While the broad trend still stays weak, the short covering rallies witnessed in the previous session is likely to extend towards 15700 initially followed by 15950, but requires clearing the same for further upside. However, a direct fall below 15200 with considerable volume may strengthen the prevailing broad bearish trend.

TURNAROUND

Resistances

LEVELS

 Supports

15640-15700

15950-15200

15380/15250

15800/15950

15100-15050

16060/16160

14900/14800

 

Source: Geojit Comtrade

Download this report (full content – PDF file) here

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