[Geojit Comtrade] Daily report on Natural Rubber: October 17, 2014

MARKET COMMENTARY

⊳ Natural rubber in the major overseas market jumped over three per cent on Friday after Thailand introduced measures to prop-up prices from the multi-year lows. TOCOM and AFET rubber futures gained more than three per cent while on SHFE the benchmark January rubber futures rose more than 2.5 per cent following moves by the top natural rubber producer Thailand to buy the commodity to build stockpiles.

⊳ Range bound moves were witnessed in the local natural rubber market on Thursday. In the physical market the quotes for RSS4 varied between Rs.123-122.50 a kg while on NMCE the grade ended in red. However, sharp gains witnessed in the international market coupled with limited supplies may provide firm support for prices to climb up though concerns over demand is still likely to weigh on.

MARKET NEWS

Japanese Rubber Futures Rally On Shanghai Gains

⊳ Thailand’s National Rubber Policy Committee approves a plan to buy rubber from October 22 to prop-up prices. According to the nation’s Deputy PM, Rubber Estate Organisation will spend 20 billion baht for building stockpiles. Another 10 billion baht will be allocated to rubber groups to buy rubber sheets.

⊳ Kerala Chief Minister Oommen Chandy demanded a total ban on rubber imports while submitting a memorandum to the PM, besides seeking imposition of higher duty rates on synthetic, sheet and block rubber and other rubber products.

⊳ Inventories in Qingdao, China’s main rubber-trading hub, fell to 143,800 mt as of Oct. 14 from 154,100 mt on Sept. 26, according to e Qingdao International Rubber Exchange Market.

⊳ Kerala Government decides to procure rubber from farmers at Rs.5 higher than the market rate and also to meet the Prime Minister to appraise the current situation in the rubber market in order to urge the latter to take necessary action.

⊳ 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.

TECHNICAL VIEW

RUBBER Nov NMCE

Zigzag moves are being witnessed inside 11750-12300 ranges and a break out from either the side is mandatory for further directional move. A rise above 12300 with volume could attract more buying possibly towards 12500 or more to 12700 ranges. Alternatively, a fall to 11450 cannot be ruled out if prices slip below 11750.

TURNAROUND