MARKET COMMENTARY
Selling pressure stayed in the local natural rubber market owing to limited off-take from the major natural rubber consuming sector. On Tuesday, RSS4 in the spot market was hovering near its lowest since mid-December, weighed down by a muted demand. NMCE rubber futures too culminated the session on a weaker note after failed attempts to bounce back. Rise in natural rubber production amidst fall in consumption and increasing stocks are likely to restrict gains. However, fall in imports due to comparatively cheaper local produce and upcoming lean production season is likely to lent support to the falling prices.
Natural rubber prices are seen inching down in the international market on Wednesday. TOCOM rubber futures extended the previous session losses as Japanese currency strengthened after BoJ deferred the monetary stimulus. However, International Rubber Study Group’s observation that the global surplus for natural rubber may contract for the current and next year due to a rebound in Chinese and US economy limited losses.
MARKET NEWS
According to IRSG, Production is set to outpace consumption by 179,000 metric tons this year and 153,000 tons in 2014.
According to AIRIA, rubber imports into India in January and February are likely to fall further on a sharp drop in local prices in the past three months due to lower December shipments.
Thailand, the world’s biggest rubber producer and exporter, has no plans to sell government rubber stocks, which have been bought from farmers in an intervention program to shore up prices, on the overseas market, according to government adviser.
As a part of price support program, Thailand spent 17.4 billion baht to buy 182446 tonnes of rubber. Also, the Cabinet approved plan by Rubber Estate Organization to disburse 5.0 billion baht from the Bank for Agriculture and Agricultural Cooperatives to continue the program.
China’s GDP rose to 7.9 per cent in the Q4 of 2012 on a YoY basis following seven straight quarters of slowdown. Industrial production recorded a growth of 10.3 per cent in December while retail sales rose 15.2 per cent during the same period on YoY basis.
TECHNICAL VIEW
RUBBER Feb NMCE
Broad Trend: Weak
Near Term: Sideways to Negative.
TURNAROUND
|
Resistances |
LEVELS |
Supports |
|
15960/16050 |
16250-15700-15500 |
15700/15540 |
|
16240/16400 |
|
15260/15100 |
|
16540/16700 |
|
14950/14700 |
Source: Geojit Comtrade
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