MARKET COMMENTARY
- Natural rubber slipped to its lowest level since early 2010 in the Indian market last week, dragged down by weak fundamentals. Despite heavy rains in the major rubber growing areas in Kerala, poor off-take by the tyre sector, higher imports and bearish cues from the overseas market kept quotes in the local market on the bearish turf. In the physical market, RSS4 grade rubber slipped to Rs.135 a kg, while NMCE rubber futures culminated last week’s session in red with the benchmark September rubber futures making fresh contract lows.
- In the overseas market, weak trend prevailed. On Monday, TOCOM rubber resumed to decline after an initial rise. Sentiments stayed weak on concerns over demand from the top consumer China amidst a supply glut.
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 year for 7 years, 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
While the trend is likely to stay bearish, a mild pullback to 13480/13650 cannot be ruled out before resuming the downtrend. However a direct fall below 13200 may see prices slipping towards 13000 ranges or more.
TURNAROUND
| Resistances | LEVELS | Supports |
| 13480/13650 | 13860-13650-13200 | 13350-13200 |
| 13760/13860 | 13050-12800 | |
| 14020-14100 | 12500-12400 |
Source: Geojit Comtrade
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