MARKET COMMENTARY
Steep declines are being witnessed in the natural rubber prices in the domestic as well as in the international front. On Tuesday, NMCE rubber futures plunged more than three per cent tracking weakness in the major overseas bourses
MARKET COMMENTARY
Steep declines are being witnessed in the natural rubber prices in the domestic as well as in the international front. On Tuesday, NMCE rubber futures plunged more than three per cent tracking weakness in the major overseas bourses amidst weak fundamentals. In the physical market too, RSS4 stretched losses despite scanty arrivals to the market. In the major overseas market, the commodity is touching fresh multi-year lows as fears of oversupply hurt the overall market sentiments amidst worries over demand from the top consumer China. On Wednesday, TOCOM rubber futures plunged to a five year low while on SHFE, the benchmark January futures tanked to new lows.
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
Weakness is likely to persist and once it clears the immediate support of 11600, further sell-off to 11450 or more seems possible. Meanwhile, even as mild pullbacks may not be ruled out, it is necessary to clear and sustain above 11970 to see an extension to such up moves.
TECHNICAL VIEW
RUBBER Oct NMCE
Weakness is likely to persist and once it clears the immediate support of 11600, further sell-off to 11450 or more seems possible. Meanwhile, even as mild pullbacks may not be ruled out, it is necessary to clear and sustain above 11970 to see an extension to such up moves.
TURNAROUND
| Resistances | LEVELS | Supports |
| 11800/11970 | 12250-11970-11600 | 11450/11350 |
| 12100/12250 | 11250/11100 | |
| 12340/12500 | 11050/10900 |
Source: Geojit Comtrade
Download this report (full content – PDF file) here
