MARKET COMMENTARY
In the week gone by, natural rubber prices in the local market were on a recovery mode. The commodity used in making tyres was seen rising to its highest since early January this year, triggered by anticipation of a rise in import duty. A rebound witnessed in the overseas market and lean production season in the major rubber growing areas bolstered the prices too. On NMCE, the grade rose for the second consecutive week, with the most active April rubber futures posting a weekly gain of about three per cent. However, declining consumption and high stocks is likely to weigh on the markets.
Natural rubber in the overseas market is seen stretching previous week’s advances in the international market on Monday. TOCOM rubber futures jumped to a two week high boosted by upbeat economic data from US and on weaker yen. Lean production period in Thailand and Malaysia too lent support. Yet, burgeoning stockpiles in China is likely to cap gains.
MARKET NEWS
Rubber inventories in the warehouses monitored by SHFE rose four per cent to 107481 tonnes in the previous week.
Crude rubber stockpiles held at Japanese warehouses rose 3.8 percent to 11,363 metric tons on Feb. 28, according to data from the Rubber Trade Association of Japan.
Natural rubber imports by China plunge 40 per cent in February to 150000 tonnes on month on month basis.
India’s natural rubber output fell five per cent to 61000 in February. Imports and consumption declined as well. Consumption dropped by nine per cent while imports slumped a whopping 61 per cent during the same period.
Both tyre and non-tyre manufacturers find that the government’s proposed 70 per cent duty hike on import of natural rubber will harm the domestic manufacturing sector, and give competitive advantage to importers of finished goods from China.
According to ANRPC, natural rubber imports by China jumped 17.6 per cent to 482000 tonnes in the first two months. The country’s consumption is seen rising nine per cent this year to 4.18 million tonnes according to the organisation.
TECHNICAL VIEW
RUBBER Apr NMCE
Broad Trend: Weak
Near Term: With prices clearing stiff resistances of 16380-16500 last week, the weakness has lessened considerably. Now, 17050 will be the next major hurdle upside, which it requires to clear to continue the positive momentum. Weakness will be seen below 16100 ranges.
TURNAROUND
|
Resistances |
LEVELS |
Supports |
|
16740/16850 |
17050-16100 |
16380/16250 |
|
16950/17050 |
|
16140/16040 |
|
17200/17500 |
|
15900/15750 |
Source: Geojit Comtrade
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