MARKET COMMENTARY
Sentiments stayed feeble in the Indian natural rubber markets and on Monday, the commodity stretched losses to hit its weakest level since December 2009. Amidst waning demand, bearishness in the international market continued to build pressure on natural rubber to move south. In the physical market, RSS4 grade rubber was quoted around Rs.125 a kg. NMCE rubber futures slipped too, shedding more than 2.5 per cent.
On Tuesday, sharp declines in prices are being witnessed in the major overseas natural rubber market. SHFE rubber futures slumped to its lowest level since March 2009 as worries over supply glut weighed upon the overall market sentiments. TOCOM and AFET rubber futures declined as well.
MARKET NEWS
- India’s imports in the first five months of the financial year that started on April 1 stood at 176,288 tonnes, up 37 percent from a year ago according to the Rubber Board.
- 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.
- 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 billion 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
Following the previous session declines, prices were held near the support of 12000. For the day weakness is likely to continue and slippage past 11850 with considerable volume could call for another round of sell-off possibly towards 11600/11450 or even more. Now, it is mandatory to break and sustain above 12500 to get a respite from sell-offs.
TURNAROUND
| Resistances | LEVELS | Supports |
| 12250/12340 | 12500-12000-11850 | 12000/11900 |
| 12500/12650 | 11850/11600 | |
| 12800/12950 | 11450/11350 |
Source: Geojit Comtrade
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