MARKET COMMENTARY
Natural rubber prices extended weakness in the local market on Wednesday. RSS4 in the Kottayam market dropped to Rs.160/ kg to its weakest since late December while NMCE rubber futures dropped around 1.5 per cent. The most active February rubber futures in NMCE tested its lowest in four weeks. Retreat in international natural rubber prices along with fall in consumption, lack of buying interest and higher stocks pressurized prices. Yet, with the peak production to end soon only to be followed by wintering season, anticipation of a turn-around in prices during the lean production period provided lower level support.
Stretching losses, natural rubber is seen falling in the overseas markets on Thursday. TOCOM and SHFE rubber futures resumed to decline following an initial rise. Better than expected US earnings had lifted prices earlier. However, yen resuming to appreciate and concerns over demand from the top consumer China probably weighed on. According to reports, China is unlikely to step up purchases ahead of the Lunar New Year holidays as it may turn to its own rubber inventories which is being offered at discounted prices.
MARKET NEWS
EU new car sales plunged 8.2 per cent to a 17-year low in 2012, registering its biggest annual drop since 1993.
NMCE December natural rubber delivery soared with 1544 tonnes being delivered against 183 tonnes during the same period the previous year, registering 800 per cent rise.
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.
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.
TECHNICAL VIEW
RUBBER Feb NMCE Despite penetrating the support at 16100 in the previous session, a brief pullback was seen. While, the bias stays negative, it requires clearing the congestion support range 15900-15700 regions for further downside. Conversely, a move past 16400 is likely to lift prices towards 16540-16620, but requires clearing 16700 for further upsides.
Source: Geojit Comtrade
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