MARKET COMMENTARY
In the week gone by natural rubber in the Indian market continued its downtrend in lacklustre trades. RSS4 in the physical market dropped to its weakest levels since December 2009 as demand stayed muted amidst higher imports even as arrivals to the market dipped. NMCE rubber futures too remained under the stranglehold of bears. Weakness in the overseas market too pondered upon the overall market sentiments.
As the week’s session commences, natural rubber in the major overseas market are seen declining as worries over supply glut weighed on. TOCOM rubber futures were seen stretching losses and so were AFET rubber futures. SHFE exchange stayed closed on account of Mid-Autumn Day.
MARKET NEWS
China imported 280000 tonnes of rubber in August.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.6 percent to 166328 tonnes last week.
Thailand to increase area in which it will cut down aging trees by 33% to 400,000 rai (64,000 hectares) a year in season starting Oct., says Prasit Meadsen, acting director of Office of the Rubber Replanting Aid Fund.
Thailand’s Bank for Agriculture and Agricultural Cooperatives to lend 15 billion bhat to rubber farmer groups to build stockpiles and increase processing .
Inventories in Qingdao, China’s main rubber trading hub, fall to 172,400 mt as of Aug. 29 from 188,000 on Aug. 15 according to Qingdao International Rubber Exchange Market.
Chanachai Plengsiriwat, managing director of Thailand’s Rubber Estate Organization, says the country signed an agreement last week to sell 100,000 tons of rubber and plans to sell a further 108,000 tons soon.
Thailand’s National Council for Peace and Order has approved a budget of 5.94 billi on baht for the overhaul of the rubber industry. The measures involve maintaining a stock to stabilise prices, improving planters’ liquidity, developing the rubber market and conducting research and development on rubber products.
TECHNICAL VIEW
RUBBER Oct NMCE
Likely to stretch the prevailing weakness towards 12200 or even more. However, unanticipated rise over 12800 could invite some short-covering and buying.
TURNAROUND
| Resistances | LEVELS | Supports |
| 12480/12650 | 12800-12200 | 12200/12000 |
| 12800/12950 | 11900-11850 | |
| 13050/13200 |
Source: Geojit Comtrade
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