MARKET COMMENTARY
Following the steep plunges, a rebound was witnessed in the domestic futures front on Wednesday. NMCE rubber futures bounced back more than one per cent probably on short covering. In the physical market, meanwhile, RSS4 steadied near the lowest level in more than three and half years. Even as the broad trend stayed bearish, worries over decline in production even in ongoing peak production phase and narrowing gap between natural rubber prices in the local and international market may have lend support to prices.
On Thursday, natural rubber prices in the international market are seen rising more than one per cent. TOCOM rubber futures inched up supported by a weaker yen. Also, investors are keeping an eye on the developments in ongoing political unrest in Thailand as well as brewing tensions between Japan and China.
MARKET NEWS
Crude rubber stockpiles held at Japanese warehouses rose 15.3 percent to 6,569 metric tons on Nov. 10, according to data from the Rubber Trade Association of Japan.
According to a report from Economic Intelligence Unit, global natural rubber surplus may reach 134,000 metric tons this year, 200,000 tons next year and 257,000 tons in 2015.
TOCOM April contract expired with 286 lots being delivered compared to 219 lots delivered in the previous month.
Kerala asks the Centre to stay the decision to allow import of natural rubber without enhancing the excise duty, saying the move has led to a sharp drop in prices and farmers in the key producing state worried.
Rubber inventories in the warehouses monitored by SHFE rose 5.1 per cent to 172022 tonnes last week.
Malaysia’s production of natural rubber in September declined 1.3 per cent to 71,921 tonnes year-on-year, but exports increased 32.3% to 79,808 tonnes compared to September of 2012 according to its the Department of Statistics.
According to the Association of Natural Rubber Producing Countries, natural-rubber production may rise 3.6 percent to 11 million tons this year from 2012.
TECHNICAL VIEW
RUBBER Jan NMCE
Even as the broad trend stays weak, with prices holding the lower trend line support, the short covering rallies being currently witnessed is likely to continue towards 15600-15700 levels. However, it is necessary to break and sustain above 15900 to extend the buying momentum. Alternatively, a direct fall below 15200 with considerable volume could induce more selling pressure.
TURNAROUND
|
Resistances |
LEVELS |
Supports |
|
15600/15700 |
15900-15750-15200 |
15350/15200 |
|
15800/15950 |
|
15100-15000 |
|
16050/16150 |
|
14900/14770 |
Source: Geojit Comtrade
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