[Geojit Comtrade] Daily report on Natural Rubber: January 23, 2014

MARKET COMMENTARY

Sentiments stayed rather muddled in the local natural rubber market. On Wednesday, RSS4 in the physical market traded quite steady with a mild negative bias while on NMCE, the grade was seen climbing up during the afternoon session to culminate the session nearly one per cent up. While the broad trend remained weak, it seems investors are probably waiting for fresh direction cues.

Natural rubber in the overseas market is in a negative turf on Thursday. A weak China manufacturing PMI has aggravated further concerns over the demand from the top consumer. The preliminary estimates for the month of January released earlier today showed a contraction in factory activity for the first time six months. However, concerns that output from the top consumer may decline from the top producer, Thailand, owing to political unrest may lend support.

MARKET NEWS

Crude rubber stockpiles held at Japanese warehouses rose 4.8 percent to 13,164 metric tons on Jan. 10, according to data from the Rubber Trade Association of Japan.

Rubber inventories in the warehouses monitored by SHFE rose 5.6 per cent to 200815 tonnes last week.

Rubber inventories in Qingdao, China’s main hub for the commodity, advanced to 304,300 metric tons today, from 290,700 tons at the end of December, the Qingdao International Rubber Exchange said.

China imported 350,000 tonnes of rubber in December, up 66.7 percent on the same month a year ago.

According to Thai Office of Agricultural Economics, rubber production in Thailand may rise 4.3 per cent in 2014 to 4.03 million tonnes.

Annual car sales in India declined for the first time in 11 years in 2013, posting a 9.59 percent fall, according to SIAM.

Natural rubber imports by India in December jumps 46 per cent to 26853 tonnes year on. Production falls 5.3 per cent to 108000 tonnes while consumption rose about 1.4 per cent to 79500 tonnes during the same period.

TECHNICAL VIEW

RUBBER Feb NMCE

With prices holding 15200-15100 ranges downside, pullbacks were witnessed in the previous session. However, it is mandatory to break and sustain above 15550 for further upsides. Else, range bound moves inside 15550-15100 may be seen and slippage past 15100 may have the potential to revisit the recent lows.

TURNAROUND