[Geojit Comtrade] Daily report on Natural Rubber: November 3, 2014

MARKET COMMENTARY

⊳ Sentiments turned bland in the local natural rubber market last week. In the physical market, RSS4 retreated from the two month highs and so were NMCE rubber futures. Subdued demand from the tyre sector continued to hammer down the commodity prices despite restricted supplies and advanced in the major overseas market. Even as the peak production season has commenced, arrivals to the market are on the lower side as tapping has not resumed to full swing in the major natural rubber growing areas in Kerala after the monsoon break owing to unfavourable weather and low prices.

⊳On Monday, natural rubber in the international market is in red. While the trend setting TOCOM exchange stayed closed on account of substitute holiday for National Culture Day, SHFE and AFET rubber futures trended lower

MARKET NEWS

⊳ Japan-based Yokohama Rubber today says it has started commercial production at its first manufacturing plant in India at Bahadurgarh, Haryana with an investment of over Rs 300 crore and the unit has an installed capacity of 2,000 tyres per day.

⊳ Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.3 percent to 173792 tonnes last week.

⊳ TOCOM October rubber futures expired with 395 lots being delivered compared to 615 lots delivered in the previous month.

⊳ Thailand, Indonesia and Malaysia likely to meet on Nov. 20-21 to discuss plans to set prices together and reduce supply.

⊳ Indonesian Rubber Association makes a second appeal to its members to impose strict limit on sales until the second quarter of 2015

⊳ The Malaysian government has allocated 100 million ringgit ($30.4 million) to support rubber farmers following a slump in global prices to five-year lows. A subsidy programme will be activated when the price of SMR20 grade rubber falls to 4.60 ringgit per kg.

⊳ 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.

TECHNICAL VIEW

RUBBER Dec NMCE

While there exist weakness, support at 11950 if held down side could call for a pullback possibly towards 12250. However, slippage past the same with considerable volume is likely to see prices edging lower to 11800-11600 ranges.

TURNAROUND