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[Geojit Comtrade] Daily report on Natural Rubber: February 10, 2014

MARKET COMMENTARY

Kerala State government’s measures support the market buoyed natural rubber in the Indian markets last week. RSS4 in the physical market traded firm around Rs.144 a kg after hitting one week high earlier last week while NMCE rubber futures posted weekly gains with the most active March rubber futures ending the week in green for the first time in six weeks. In the wake of steep plunges in natural rubber prices to its weakest level about four years, the government announced that it will procure the commodity Rs.2 above the market rate in order to stabilise the prices and will review the scheme after procuring 10000 tonnes. International Rubber Consortium deciding to meet watching sharp declines in natural rubber prices in the major overseas physical market too supported the sentiments.

MARKET NEWS

The International Rubber Consortium that met on February 8th to review the current market situation assessed that the current stock levels in the ITRC is lower than being reported in media and that wintering in coming months is likely to lower the stocks further. It acknowledged that the current prices are unreasonably low and urged the respective Trade Associations in ITRC countries not to offer natural rubber at such low prices.

Kerala State government has decided to procure rubber directly from rubber growers by paying Rs.2 over and above the rate daily market rate fixed by the Rubber Board.

Rubber inventories in the warehouses monitored by SHFE remained unchanged at 207658 tonnes last week. ⊳Kerala Finance Minister, K M Mani, assured that a system will be put in place to ensure legitimate price for rubber and added that the legitimate price will be decided after taking the average of rubber price in the previous years. ⊳Crude rubber inventories at Japanese ports rose 12 percent from 11 days earlier to a near seven-year high of 17,387 tonnes as of Jan. 31, data from the Rubber Trade Association of Japan showed.

Natural-rubber surplus may narrow to 241,000 tons from 384,000 tons last year if global economic growth in line with outlook from IMF, according to data from International Rubber Study Group.

TECHNICAL VIEW

 RUBBER Mar NMCE

The bounce back witnessed last session is likely to continue and sustained trades above 15100 with considerable volumes could lessen the prevailing weakness. A direct fall below 14400 will strengthen bears.

TURNAROUND

Resistances

LEVELS

 Supports

15000-15100

15100-14400

14750/14600

15250/15400

14400/14200

15550/15750

14150/14050

 

Source: Geojit Comtrade

Download this report (full content – PDF file) here

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