MARKET COMMENTARY
Natural rubber in the Indian market registered losses for the second straight year in 2012. In the physical market, RSS 4 grade rubber lost a whopping 18 per cent while in NMCE, the losses were recorded at 16.5 per cent. The market was mostly driven by the demand side factors in the previous year unlike in the earlier years. Sluggish demand from the major natural rubber consuming industries, higher imports owing to wide gap between prices prevailing in the local and international market, quality concerns, slowing auto sales, unfavourable global as well as domestic macroeconomic conditions along with steep slides in natural rubber prices in the international market built strong pressure on prices to move south. Climatic conditions remaining mostly favourable through out the year added on further pressure. However, attempts by the top natural rubber producing countries to arrest steep plunges witnessed especially during the 2nd half of 2012 cushioned the prices.
Major overseas natural rubber markets to remain shut today.
MARKET NEWS
A meeting was held between Prof. K.V. Thomas, Minister of State (Independent Charge) for Consumer Affairs, Food and Public Distribution and Anand Sharma, Minister for Commerce, Industry and Textiles, Friday in New Delhi to review fall in domestic price of natural rubber in the month of December, 2012.
Rubber inventories in the warehouses monitored by SHFE rose 0.6 per cent to 98280 tonnes.
Rubber output in Indonesia, the largest grower after Thailand, may decline for the first time in four years in 2013 as the country limits output and shipments in coordination with other producers to support a rally.
The rubber industry has sought lower import duty on raw materials such as butyl rubber and hi-tech synthetic rubbers, while it wants the duty on finished products to be kept high. A pre-Budget plea by the AIRIA, has asked for reduction in customs duty on natural rubber (NR) from the current 20 per cent or Rs 20 a kg to 7.5 per cent or Rs 10 a kg, whichever is lower.
TECHNICAL VIEW
RUBBER Feb NMCE
Inability to clear the strong resistance near 16960 saw prices turning lower. Now, 16500 regions seem to be a considerably good support, below which the liquidation is likely to continue. However, on the higher side, prices require clearing congestion region of 16960-17070 for any further upsides.
Source: Geojit Comtrade
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