MARKET COMMENTARY
- Weak fundamentals continued to pressurise natural rubber in the Indian market. On Thursday, the commodity declined further as demand stayed meagre. On NMCE, RSS4 lost nearly one per cent with the most active September rubber futures hitting fresh lows while in the physical market, quotes dipped to Rs.136.50 a kg. Despite incessant rains in the major natural rubber growing areas, lacklustre demand, coupled with higher imports weighed on overall market sentiments.
- As the week’s session culminates, TOCOM rubber futures are probably on its course to post weekly losses pressurized by weak equities and other industrial metals. However, moves by Thailand to reduce plantation area by 16000 hectares a year for seven years and upbeat trade balance data from China may lend support.
MARKET NEWS
- China’s natural rubber imports in July stood at 280000 tonnes.
- Thailand plans to reduce plantation area by 100,000 rai (16,000 hectares) a yr for 7 yrs, according to the Office of the Rubber Replanting Aid Fund.
- Global natural rubber output from key growers shrinks to 5.83m mt in first seven months from yr-ago period according to Association of Natural Rubber Producing Countries.
- Natural rubber imports by India in July rose 14.8 per cent to 36997 tonnes on YoY basis, according to the Rubber Board.
- Thai Ministry of Agriculture and Agricultural Cooperatives to ask the Natural Rubber Policy Committee this Friday for 30 billion baht budget to increase the utilisation of natural rubber from 10 percent to 30 percent of four million tonnes of annual yield.
- Thailand’s military government to encourage farmers in the world’s biggest rubber producer and exporter to cut down more rubber trees in a bid to restrict supply to help shore up prices.
- NR inventories in Qingdao, China’s main rubber trading hub, drop to 214,300 mt from 239,000 mt as of July 31, according to Qingdao International Rubber Exchange Market.
- The Association of Natural Rubber Producing Countries’ 7th Annual Rubber Conference to be held in Kuala Lumpur, Malaysia on 13th October 2014.
TECHNICAL VIEW
RUBBER Sep NMCE
Following an initial bounce back, prices retreated in the previous session to make new lows. Looking ahead, weakness is likely to continue. However, pullbacks to 13500/13650 cannot be ruled out and such moves extending beyond 13860 should lessen weakness.
TURNAROUND
| Resistances | LEVELS | Supports |
| 13500/13650 | 13860-13650-13200 | 13370-13200 |
| 13760/13860 | 13050-12800 | |
| 14020-14100 | 12500-12400 |
Source: Geojit Comtrade
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