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[Geojit Comtrade] Daily report on Natural Rubber: January 20, 2014

MARKET COMMENTARY

In the week gone by, natural rubber in the Indian markets remained under the strangle hold of bears. In the physical market, RSS4 grade rubber dwindled to its weakest level since March-2010. Weak cues from the overseas market coupled with muted demand from the major natural rubber consuming sector and higher imports dragged prices lower. NMCE rubber futures plunged too, testing its lowest level since May-2010. However, mild short covering rallies were seen during the weekend.

On Monday, sentiments were rather muddled in the overseas market. While SHFE and AFET rubber futures are seen rising, TOCOM rubber futures dipped weighed down by a stronger yen. Burgeoning stockpiles and the slowing pace of China’s economic growth too weighed on. However, concerns over supplies from the top producer Thailand lend support.

MARKET NEWS

Rubber inventories in the warehouses monitored by SHFE rose 5.6 per cent to 200815 tonnes last week.

Rubber inventories in Qingdao, China’s main hub for the commodity, advanced to 304,300 metric tons today, from 290,700 tons at the end of December, the Qingdao International Rubber Exchange said.

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.

TECHNICAL VIEW

 RUBBER Feb NMCE

The broad bearish sentiments remain intact. However, the short covering rallies witnessed during the last session may have the potential to extend towards 15300/15500 ranges, but requires clearing 15750 to lessen the prevailing weakness. Alternatively, a fall below the recent low could target 14500.

TURNAROUND

Resistances

LEVELS

 Supports

15300/15400

15750-15550-14850

15100-15000

15550/15700

14850-14800

15800/15950

14600/14500

 

Source: Geojit Comtrade

Download this report (full content – PDF file) here

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