[Geojit Comtrade] Daily report on Natural Rubber: October 15, 2014

MARKET COMMENTARY

⊳ Gains in the overseas market coupled with limited supplies lend firm support to natural rubber prices in the local market. On Tuesday, RSS4 grade rubber traded steady near Rs.122 a kg while on NMCE rubber futures culminated the session in green following a few zigzag moves. However, lingering worries over demand weighed on.

⊳ A mixed trend is being witnessed in the overseas natural rubber market on Wednesday. In lacklusture trades, TOCOM and SHFE rubber futures were in red while AFET rubber futures are in green. Decline in crude oil prices amidst worries over global economic growth weighed on overall market sentiments though moves by the top natural rubber producing countries to check further plunges in prices lend support.

MARKET NEWS

⊳ According to Rubber Board, India’s natural rubber imports in September dropped 12.6 percent from a year earlier to 41,848 tonnes, while production plunged by a quarter to 60,000 tonnes due to higher rains in key producing regions. Consumption rose 6.1 per cent 85500 tonnes on YoY basis.

⊳ Crude rubber inventories in the Japanese ports stood at 13910tonnes as of Sep 30, down 2.4 per cent from 10 days ago according to Rubber Trade Association of Japan.

⊳ Rubber output from Thailand unlikely to rise beyond 4.0million tonnes in 2014 according to Thai Rubber Association.

⊳ In the recently held meeting of the International Rubber Consortium in Melaka, top natural rubber producing countries pledges to bolster prices and urges members not to sell below current levels.

⊳ Natural rubber imports by China amount to 320000 tonnes in September according to trade data.

⊳ Indian natural rubber consumption may reach one million tonnes this year while production is likely be around 885000-900000 tonnes according to ANRPC.

⊳ Growers ask govt. and exporters to take steps to boost prices of rubber sheet to 80 baht/kg in 45 days, says Perk Lertwangpong, head of the Rubber Holders Cooperatives Federation of Thailand.

TECHNICAL VIEW

RUBBER Nov NMCE

As long as 11750 hold downside, pullbacks are likely towards 12100 ranges. However, strong upsides are likely only on a voluminous break above 12300. Slippage past 11750 should intensify weakness.

TURNAROUND