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By Rahul Dhuri
MUMBAI – The bearish trend in the rubber market is likely to continue in the coming week, with futures contracts of the commodity on the Indian Commodity Exchange expected to extend their fall, tracking weakness in benchmark contracts on the Tokyo Commodity Exchange, traders said.
On ICEX, the most active December contract was at 12,580 rupees per 100 kg, up 42 rupees from Monday, as market participants bought at a bargain after prices hit a six-week low of 12,500 rupees on Monday.
However, the overall trend is bearish, as prices fell by 407 rupees last week.
“The bearishness in rubber market will continue tailing fall in benchmark TOCOM contracts and due to subdued demand from domestic stockists,” said Murugesh Kumar, product manager at Inditrade Derivatives and Commodities Ltd.
Futures contracts of rubber on TOCOM hit a two-year low of 160.6 yen (104.70 rupees) per kg today due to concerns about demand from China, analysts said.
Worries about an economic slowdown in China, the largest consumer of rubber, dampened sentiment.
The most-active April rubber contract on the Japanese bourse was down 0.1% at 162.1 yen per kg.
Weakness in natural rubber contracts on the Shanghai Futures Exchange and expectations of a rise in global rubber production further contributed to the downside.
Meanwhile, a fall in rubber prices in the key spot markets of Kerala is also seen weighing on rubber contracts on ICEX, traders said.
Rubber prices are likely to fall due to expectations of good availability of the commodity by mid-November because tapping in key growing areas has started, said Kurian Abraham, a rubber trader.
A rise in rubber imports and dwindling demand from domestic buyers and tyre manufacturers is also seen weighing on prices, traders said.
In Kochi and Kottayam, both in Kerala, the widely-traded RSS-4 variety of rubber was sold in the range of 125-126 rupees per kg, down 1 rupee from Monday, Abraham added.
The commodity is likely to trade in the range of 121-124 rupees per kg in the coming weeks, traders said.
On ICEX, the December contract of rubber may find support at 12,350 rupees per 100 kg, and face resistance at 12,800 rupees in the next few sessions, Murugesh added. End
US$1 = 73.54 rupees
Edited by Avishek Dutta
