MARKET COMMENTARY
A mixed trend was witnessed in the Indian natural rubber market on Monday. While latex (drc60%) prices continued to rise, RSS4 in the physical market retreated from the nine month high. On NMCE too the grade extended its decline despite lingering worries over availability. The commodity is under pressure from falling prices in the overseas market amidst lacklustre macro economic conditions and falling auto sales. The steep rise of natural rubber prices in local market has significantly widened the difference between prices prevailing in the Indian and other major international market, throwing wide open the opportunity of higher imports. In the mean time, rubber futures are bound south on TOCOM exchange that reopened today after an extended weekend holiday. SHFE rubber futures inched lower as well as worries over economic growth gripped the market after weak Chinese data.
MARKET NEWS
Thailand, the world’s biggest rubber producer and exporter, is asking other major producers Malaysia and Indonesia to help it set a benchmark rubber export price, which has fallen by almost a fifth since its peak this year due to weak demand.
Rubber inventories in Qingdao, China’s main hub for the commodity fell to 330,300 metric tons today, from 341,900 tons on June 28 according to the Qingdao International Rubber Exchange.
The Rubber Board sets target of bringing 4.5 lakh hectares of land under rubber cultivation in the north eastern region.
According to Rubber Board, natural rubber imports into India fell 4.97 percent on year to 19,695 tonnes in June, while production also fell 12.9 percent to 54,000 tonnes in the same period. Consumption declined 2.3 percent to 82,000 tonnes in June.
China, the world’s largest natural rubber importer, imported 130,000 metric tons of the material in June this year, 18.8% less than in the corresponding period of last year, according to the statistics released by the General Administration of Customs.
Car sales in India fell for a record eighth month in row in June with a dip of 9.0 percent as economic slowdown and low consumer sentiments continue to hit demand.
TECHNICAL VIEW
RUBBER Aug NMCE
Even as the trend seems positive, it is likely to extend the lower correction towards 18100-18000 ranges before bouncing back. However, such downsides extending beyond 18000 levels may induce weakness.
TURNAROUND
| Resistances | LEVELS | Supports |
| 18580-18700 | 19000-18000 | 18200-18100 |
| 18850/19000 | 18000/17850 | |
| 19250/19430 | 17650/17500 |
Source: Geojit Comtrade
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