MARKET COMMENTARY
Extending earlier gains, natural rubber is seen firming up in the local market on Thursday buoyed by limited supplies and uptrend in the overseas market. Quotes for RSS4 in the physical market rose to its highest in about three weeks. In NMCE, the benchmark February rubber futures climbed to its highest since mid-December. While supplies has been thin, widening gap between natural rubber prices in the local and major overseas market with Indian grade currently being on a discount, the prospects of exports and re-exports have increased. Moreover, peak production period is about to end in January that will be following by ‘wintering’ season during which production is likely to be on the lower.
TOCOM rubber futures shot up to eight month high as the exchange reopened today after the New Year holidays supported by a weaker yen and rising US car sales. Shanghai rubber futures is seen rising too, however, AFET rubber futures is seen edging down after the recent advances. Meanwhile, with rise in prices demand remained muted in the physical market even though buyers from US and Singapore were seen chasing SIR 20.
MARKET NEWS
According to the Rubber Board, India’s synthetic rubber consumption rose by 6 per cent to 2.26 lakh tonnes in the first half of this fiscal, while, production rose marginally to 54,778 tonnes during the period.
According to Thai Rubber Association, rubber exports from the country is expected to remain on rise in 2013, with growth estimated about 3.0-5.0 per cent boosted by higher demand from emerging markets including China, India and Brazil.
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 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.
TECHNICAL VIEW
RUBBER Feb NMCE
While there exists positive bias, it requires clearing and sustaining the falling trend channel resistance of 17100 to continue rising towards 17240/17400 or more. Unsuccessful attempts to sustain above the same could call for a lower correction possibly towards 16940/16800 and even more.
Source: Geojit Comtrade
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