[Geojit Comtrade] Daily report on Natural Rubber: December 11, 2012

MARKET COMMENTARY

Even as the broad trend stayed weak, RSS4 in the local market was off the 31-month low hit in the previous week, probably lifted by bargain buying. The recent steep slide in natural rubber prices have lessened the gap between the quotes prevailing in the local and other major global markets, making the local produce more attractive. On Monday, in the physical market, the grade was quoted around Rs.161.50/ per kg, while NMCE rubber futures edged up for the second consecutive session. However, anticipation of higher arrivals as markets are currently in the midst of peak production period is likely to cap gains. Moreover, subdued auto sales in the country will also weigh on.
TOCOM rubber futures are seen easing ahead of the two day US FOMC meeting starting today. The benchmark May rubber futures eased from the two month high, though expectation of monetary easing by the US Federal Reserve lent support. SHFE rubber futures too eased while AFET rubber futures are seen inching up as it reopened today after elongated weekend holiday.

TECHNICAL VIEW

Crude rubber stockpiles held at Japanese warehouses fell 5.1 percent to 6,186 metric tons on Nov. 30 from ten days before, according to data from the Rubber Trade Association of Japan.
According to SIAM, while total sales of vehicles registered a growth of 1.79 per cent in November, passenger car sales dropped 8.5 per cent owing to high interest rates and fuel prices and other macro-economic factors.
China’s monthly passenger-vehicle sales rose to its highest in almost two years to 1.46 million units in November according to CAAM.
According to a report appeared on The Hindu, leaders of various political parties have expressed concern over the fall in price of natural rubber (NR) and have called upon the Central government to initiate the necessary measures to arrest the slide.
Natural rubber imports by China were 220,000 metric tons in November

TECHNICAL VIEW

RUBBER Jan NMCE

In the previous session, while prices managed to sustain the earlier gains, it failed to clear the crucial upside obstacle at 16860. Now, As long as 16860 cap upsides, choppy trades with a negative bias may be seen. However, a direct rise above 16860 is likely to call for 16960 or more to 17100 in the near term. Another leg of bearish moves may be seen on the breach of 15950.

Source: Geojit Comtrade

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