[Geojit Comtrade] Daily report on Natural Rubber: November 19, 2012

MARKET COMMENTARY

Trend stays bearish in the Indian natural rubber market. In the week gone by, RSS4 in the physical market dwindled to Rs.168 a kg, its weakest since late-August as muted demand from the consuming industries amidst higher imports and peak production period. A similar trend was witnessed in the futures market too. The benchmark December rubber futures in NMCE declined nearly two per cent, hitting a ten week low. While the trend is likely to remain weak in the near term, some pullbacks may be witnessed in coming days as the gap between domestic and international natural rubber prices have narrowed down considerably.
On Monday, natural rubber prices in the overseas market is seen rising. TOCOM rubber futures inched up, gaining more than one per cent supported by a weaker yen. Concerns over availability owing to persisting rains in the top natural rubber producing country Thailand too supported the sentiments.

TECHNICAL VIEW

Rubber inventories in the warehouses monitored by the SHFE rose 3.5 per cent to 66675 tonnes last week.
As a part of efforts to support prices and farmers, China has started stockpiling natural rubber and will buy between 150000- 200000 tonnes from the domestic market for the state reserves.
Thailand, Indonesia and Malaysia will be meeting on 11th and 12th December in Phuket to seek ways to stabilise rubber prices.
Malaysia’s natural rubber exports fall 3.4 per cent to 60337 tonnes in September on MoM basis.
Vietnam is likely to be among the top three natural rubber exporters in 2012, surpassing Malaysia, according to ANRPC.
According to Rubber Trade Association of Japan, crude Rubber inventories at the Japanese ports dropped to 5833 tonnes by October 31st from 6244 tonnes on October 20, 2012.
Thailand, Indonesia, Malaysia began reducing exports of natural rubber on Oct. 1, and plan to cut overseas sales by 180,000 tons this qtr, says Yium Tavarolit, chief secretary of the International Rubber Consortium.

TECHNICAL VIEW

RUBBER Dec NMCE

Japanese Rubber Futures Rally On Shanghai Gains

After taking support at the 200 week moving average of 16936 levels in the previous week, prices closed the session at 17089. While there exist weakness, prices now requires to clear 16900- 16800 regions to continue the prevailing downside moves. Else, a bounce back may be seen towards 17200 followed by 17400 or more.

Source: Geojit Comtrade

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