[Geojit Comtrade] Daily report on Natural Rubber: November 6, 2012

MARKET COMMENTARY

With supply side looking bright and demand from the tyre sector remaining muted, natural rubber continued to be under pressure in the Indian markets. On Monday, RSS grade rubber in the spot market slipped to its lowest since early-September. Climatic conditions remaining mostly favourable in the major rubber cultivating areas in Kerala improved the production prospects restricting upsides in natural rubber prices. NMCE rubber futures too edged lower, shedding more than one per cent. Also, sharp decline in natural rubber prices in overseas market weighed on the sentiments too.
Stretching previous session losses, natural rubber in the international market dropped on Tuesday. TOCOM rubber futures hit a seven week low as investors remained cautious ahead of the US elections and once in a decade leadership transition in China later this week. Concerns over global economic growth also influenced prices.

MARKET NEWS

Cambodia’s rubber exports rose 12 per cent on YoY basis during the first nine months of 2012 to 39360 tonnes.
According to Malaysia’s Deputy Minister of Plantation Industries and Commodities, the government was unlikely to set minimum price of rubber to control prices though the top three producers were to monitor closely to strengthen rubber prices.
According to International Rubber Study Group, India’s demand for both synthetic and natural rubber is expected to rise to 2.7 million tonnes by 2021.
Rubber inventories in the warehouses monitored by SHFE rose 5.3 per cent to 62965 tonnes in the previous week.
According to Rubber Trade Association of Japan, crude rubber inventories at the Japanese ports increased to 6244 tonnes as of October 20 after falling to its two-year low in early October.
Official Chinese manufacturing PMI rose to 50.2 in October from 49.8 in September probably indicating that the world’s second largest economy is perking up.
Ivory Coast’s natural rubber exports increased 15 per cent to 199277 tonnes in Jan-Sep period on YoY basis.

TECHNICAL VIEW

RUBBER Dec NMCE

Despite breaching the support of 17580, prices were held near a minor support of 17530 and a pullback was seen in the previous session. Even as the trend stays on the weaker side, upside correction towards 17760-17900 regions cannot be ruled out before resuming its downtrend. However, successful moves to break and sustain 18060 may call for 18200 or more.

Source: Geojit Comtrade

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