[Geojit Comtrade] Daily report on Natural Rubber: November 8, 2012

MARKET COMMENTARY

Erasing initial gains, NMCE rubber futures ended down on Wednesday while, quotes for RSS4 firmed up in the physical market in a lacklustre trade. The sentiments were mixed. Even as positive moves in natural rubber prices in the overseas market improved the mood in the local market, the underlying market fundamentals are mostly in favour of bears. Imports shooting up and tyre sector lowering local purchases further dented prices amidst peak production season.
On Thursday, natural rubber prices in the international market are seen retreating after rising the previous day. TOCOM rubber futures slipped towards its weakest in nearly two months as investors’ focus turned towards the threat of ‘fiscal cliff’ looming over the US economy, eroding the risk appetite. Also, leadership transition in China and persisting Euro Zone debt woes weighed on the sentiments.

TECHNICAL VIEW

According to the Rubber Board, India’s natural rubber imports more than doubled in October on YoY basis to 18326 tonnes. Production dropped 3.35 per cent to 86300 tonnes while consumption rose 8.5 per cent to 83000 tonnes during the same period.
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 early October.

TECHNICAL VIEW

RUBBER Dec NMCE

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Despite penetrating the falling trend channel resistance, inability to clear 17960 pulled down prices towards 17700 levels. For the day, expect prices to move with a negative bias possibly towards 17500- 17400 or more. However, unanticipated rise above 17960 may lift prices to 18060 initially or more to 18200.

Source: Geojit Comtrade

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