MARKET COMMENTARY
Continuing its journey southward, natural rubber prices dwindled in the local market. On Thursday, in the physical market, RSS4 grade rubber slipped to its weakest since late-March 2010 as concerns over demand amidst rising production and stocks carried on hurting the sentiments. Prices have so far slumped around 36 percent from the record highs in April 2011. In the futures market too, prices dipped, although lower level buying restricted steep declines. With the local produce being quoted lower to that in the international market, likely to restrict imports and provide opportunity for exports and re-exports. Moreover, market is about to enter a lean production phase as ‘wintering’ will start soon in Kerala.
Sentiments are mixed in the overseas natural rubber market on Friday. SHFE rubber futures dropped while AFET and TOCOM rubber futures inched up. The official Chinese manufacturing PMI eased, though it remained above the threshold level of 50 and weighed on the sentiments. Investors are now awaiting the monthly employment data from US for fresh cues.
MARKET NEWS
According to Malaysian Rubber Board, natural rubber output may expand 6.5 per cent in 2013 on improving yield and higher prices.
According to Rubber Trade Association of Japan, crude rubber inventories in the Japanese ports fell by 202 tonnes to 6934 tonnes in the 10 days to January 10 from a four month peak marked at the end of 2012
According to Vietnam’s General Statistics Office, the nation shipped 117,000 tons of rubber in Dec., up 11% from previous assessment of 105,000 tons.
TOCOM January rubber futures expired with 124 lots being delivered compared to 288 lots being delivered in December.
Rubber inventories in the warehouses monitored by SHFE fell 3.3 per cent 98007 tonnes in the previous week. According to reports, the decline is largely owing to storage regulations that forced some merchants to withdraw stocks.
According to IRSG, NR production is set to outpace consumption by 179,000 metric tons this year and 153,000 tons in 2014.
TECHNICAL VIEW
RUBBER Feb NMCE
Broad Trend: Weak Near
Term: Requires a close below 15500 for prolongation of the ensuing weakness. Else, a brief pullback may be witnessed possibly to 15800 or more.
TURNAROUND
|
Resistances |
LEVELS |
Supports |
|
15700/15800 |
15800-15500 |
15380/15260 |
|
15960/16050 |
|
15100/14950 |
|
16240/16400 |
|
14700/14500 |
Source: Geojit Comtrade
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