[Geojit Comtrade] Daily report on Natural Rubber: September 29, 2014

MARKET COMMENTARY

⊳ In the week gone by, volatile moves were witnesses in natural rubber in Indian market. In the physical market, RSS4 grade rubber was held inside the range of Rs.12100-12400 per 100 kg. While the overall trend stayed bearish, restricted supplies to the market and anticipation that Central government may take necessary steps to prop up prices improved the sentiments. However, deep plunges in the major overseas market and jaded demand from the tyre sector weighed on. On NMCE, meanwhile, zigzag moves were witnesses, but the commodity managed to culminate the week’s session in green for the first time in five weeks.

⊳Natural rubber prices in the major overseas market are seen declining as the week’s session commences, reversing previous day’s gains. SHFE rubber futures dropped more than 2.5 per cent, while on TOCOM the commodity was down more than 1.5 per cent.

MARKET NEWS

⊳ India’s Commerce Minister promises to address the problems faced by the rubber growers including imports of natural rubber and added that National Policy on Rubber will be formulated soon.

⊳ Rubber inventories in the warehouses monitored by SHFE declined by 2192 tonnes to 162649 tonnes last week.

⊳Vietnam rubber exports in August stood at 114000 tonnes and 13300 tonnes is anticipated to be exported in September according to nation’s Ministry of Agriculture and Rural Development.

⊳ Thai rubber farmers plans protest rally as rubber prices fall to multi year low.

⊳ The Thai government has postponed the sale of its remaining 100,000 tonnes of rubber stocks to avoid further depressing prices according to a senior Agriculture Ministry official.

⊳ International Rubber Consortium sees natural rubber production declining in 2014 by 2.3 per cent to 11.8 million tonnes while stockpiles are seen around 2.3-2.5 million tonnes.

⊳ Inventories in Qingdao, China’s main rubber-trading hub, fell to 192,200 mt yday from 217,400 mt on Aug. 29, according to Qingdao International Rubber Exchange Market.

⊳ The Thai government has approved 30 billion baht ($931 million) in soft loans for cooperatives and companies to use to buy rubber from farmers as a way of propping up prices.

TECHNICAL VIEW

RUBBER Nov NMCE

A rebound is being witnessed currently after taking support near 11600. However, such up moves may be short lived if it is unable to clear and sustain above 12300 with volumes. Alternatively a direct fall below 11900 could see a revisit towards recent lows or more.

TURNAROUND