MARKET COMMENTARY
Buoyed by rising global natural rubber prices and limited supplies, natural rubber prices were seen edging higher in the Indian market last week. In the spot market, quotes for RSS4 grade rubber rose to its highest in around three and a half weeks though activities remained muted owing to New Year. NMCE rubber futures too managed to sustain its earlier gains with the most active February futures testing a three week high. Steep advances in the global natural rubber prices probably lifted the appeal of the local produce as the Indian grade is currently being traded lower than that prevailing in the international market, providing less incentive to import and also increasing prospects for exports and re-exports. Moreover, growers are reluctant to raise the supplies on anticipation of rise in prices.
As the week’s session begins, a mixed trend is being witnessed in natural rubber in the overseas market. TOCOM rubber futures continued its uptrend while SHFE and AFET rubber futures are seen easing. Supported by a weaker yen and upbeat jobs report from US, TOCOM rubber futures hit an eight month high.
MARKET NEWS
According to ANRPC, natural rubber consumption by China rose 6.4 per cent to 3.83 million tonnes, while in India gained 3.9 per cent to 995,000 tonnes during 2012. Production last year amounted to 8.06m tons, excluding data from Thailand during November and December and from Indonesia during June to December. That compared with total of 10.3m tons in 2011.
Rubber inventories in the warehouses monitored by SHFE rose 1.4 per cent to its highest since March 2010 to 99658 tonnes in the previous week.
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.
TECHNICAL VIEW
RUBBER Feb NMCE As long as the falling trend line resistance of 17100 caps upside, range bound trades in 16800-17100 regions may be seen. Slippage past 16800 may see prices edging further lower towards 16700/16500 or more. Alternatively, 17100, if cleared convincingly could call for 17240/17450.
Source: Geojit Comtrade
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