[Geojit Comtrade] Daily report on Natural Rubber: May 13, 2013

MARKET COMMENTARY

Natural rubber prices in the Indian as well as in the overseas market ended on a positive note last week. In the local market, RSS4 grade rubber advanced to hit its highest level since late November 2012 bolstered by bullish moves in the international market amidst limited arrivals and improved buying interest. On NMCE, rubber futures posted gains for the third successive week and the benchmark June rubber futures rallied to test its highest level in about one and a half month. While the recent rally in prices have lessened the broad weakness prevailing in the counter, slump in auto market is likely to weigh. In the meantime, on Monday, natural rubber in the overseas market is seen steadying after its recent rally as investors were probably awaiting industrial production data from China. TOCOM rubber futures are on two month high buoyed by a weaker Japanese currency and on Chinese buying

MARKET NEWS ⊳According to the Rubber Board, India’s natural rubber imports in April fell 38 percent on year to 10,871 tonnes as tyre makers trimmed overseas purchases due to a sharp drop in local prices. Consumption rose 3.8 percent to 82000 tonnes while production showed a marginal rise by 0.6 percent to 53000 tonnes on YoY basis.

Rubber inventories in the warehouses monitored by SHFE dropped 0.9 per cent 121090 tonnes previous week.

Natural rubber imports by India poised to drop for the first time in five years on declining car sales according to the Rubber Board.

The Rubber Board, in co-operation with Automotive Tyre Manufacturers’ Association (ATMA) is organizing an awareness campaign for the small and marginal rubber growers to improve the quality of rubber and is scheduled to be conducted in the traditional rubber growing belt of Kerala, Tamil Nadu and Karnataka from 10 June 2013 to 19 July 2013.

Rubber imports by China during April was at 230000 tonnes compared to 234044 tonnes imported during March.

Crude rubber stockpiles held in Japanese warehouses rose 0.7 percent to 16,094 metric tons on April 30 to a six year high, according to data from the Rubber Trade Association of Japan.

Thailand is considering discontinuing measures curbing rubber exports upon their expiry on May 31 as they have failed to lift prices, a senior government official said on last Friday

TECHNICAL VIEW

RUBBER June NMCE

While there exists positive bias, corrective move towards 16800 ranges may be witnessed before resuming its uptrend towards 17250 or more to 17500 ranges. However, slippage past 16700 could add further downside pressure but a major reversal is seen only below 16400.

TURNAROUND