MARKET COMMENTARY
RSS4 weakened in the Indian markets on Tuesday weighed down by sluggish demand and decline seen in overseas market. In the physical market, the grade was quoted lower around Rs.162 a kg. In NMCE, the benchmark February rubber futures dropped over one per cent to hit a three week low after trading in narrow ranges for more than a week. Meanwhile, the near month January rubber futures expired yesterday. Lack of buying interest despite higher international natural rubber prices and rising stockpiles probably pressurized prices. However, fall in natural rubber imports is likely cushion the fall in prices.
Natural rubber prices are seen retreating in the international market of Wednesday, extending the previous session declines. TOCOM rubber futures were off the nine month highs and shed three per cent on concerns over demand. Bleak economic outlook and a rebound in yen might have probably prompted investors to lock-in profits. AFET and SHFE rubber futures too followed the suit.
MARKET NEWS
Natural rubber imports by India slumped 35.63 per cent in December to 13611 tonnes on YoY basis, according to Rubber Board. Consumption dropped 1.3 per cent to 78000 tonnes while production rose 3.0 per cent to 110000 tonnes during the same period.
According to Indonesian Rubber Association, the country’s natural rubber output is seen rising by seven per cent in 2013 to 3.2 million tonnes due to higher yields.
Rubber inventories in the warehouses monitored by SHFE rose 1.8 per cent to 101482 tonnes the previous week.
SIAM again revised lower the car sales growth forecast for 2012- 13 to 0-1.0 per cent mainly owing to high inflation, slowing economy and rising fuel costs.
Natural rubber imports by China declined to 210000 tonnes in December from 220000 in the previous month.
With 1.01 million tons of natural rubber exported in 2012, up 23.8 percent over 2011, Vietnam became the world’s third largest natural rubber exporter after Thailand and Indonesia, Communist Party of Vietnam Online Newspaper reported on Tuesday.
TECHNICAL VIEW
RUBBER Feb NMCE
With prices breaching the consolidation range support of 16500, there exist weakness and is likely to continue towards 16280/16100 regions initially, followed by a bounce back. However, slippage past 16100 may see prices revisiting the earlier lows of 15900-15700. Alternatively, a direct rise above 16700 may lessen the prevailing negative sentiments.
Source: Geojit Comtrade
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