[Geojit Comtrade] Daily report on Natural Rubber: November 20, 2012

MARKET COMMENTARY

RSS4 bounced back from its weakest in more than a two and a half month low of Rs.168 per kg on Monday. In the Kottayam market, the grade was quoted around Rs.170 a kg. As gains in the futures market and overseas market improves the sentiments, recent decline in rubber prices and lessening gap between prices prevailing in the local and other major international market probably attracted buying. NMCE rubber futures gained over two per cent, rising to its highest in about a week.
Natural rubber is seen stretching its previous day’s gains in the major international natural rubber markets on Tuesday. Advancing over one per cent, TOCOM rubber futures hit a two week high earlier today tracking moves in shares and crude oil prices. Concerns over supplies too supported the sentiments. However, uncertain global economic outlook is likely to cap gains.

TECHNICAL VIEW

Shanghai Securities News citing the country’s rubber industry group says large Chinese tire companies plan to establish a fund to strengthen pricing on natural rubber.
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.

TECHNICAL VIEW

RUBBER Dec NMCE

The bounce back witnessed in the previous session has penetrated the falling trend line resistance. Yet, 17650 will be the next hurdle it requires clearing to continue the prevailing buying momentum possibly to 17800-17950 regions or more. Inability to sustain above 17650 may call for a lower correction to 17300-17240 and such moves extending beyond 17100 will see prices testing the recent lows or more.

Source: Geojit Comtrade

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