[Geojit Comtrade] Daily report on Natural Rubber: November 13, 2014

MARKET COMMENTARY

⊳ Sentiments stayed feeble in the local natural rubber market. RSS4 in the physical market was hovering near the five year lows on Wednesday while NMCE rubber futures were held in thin ranges. In spite of decline in natural rubber production in the peak production phase, poor off-take by the tyre sector from the local market and burgeoning imports kept natural rubber prices on the bear turf. A rebound witnessed in the overseas market provided little help.

⊳ Natural rubber is seen stretching gains in the overseas market on Thursday. TOCOM rubber futures is ticking higher and so is SHFE and AFET rubber futures. However, movements are in thin ranges as investors probably chose to stay away ahead of the release key economic data from the top consumer China later today.

MARKET

⊳ Malaysia’s natural rubber production in September 2014 rose 20.5 per cent or 10,242 tonnes to 60,187 tonnes compared to August 2014. However, on a year-on-year basis, the production showed a decline of 16.7 per cent.

⊳ According to Rubber Board, India’s natural rubber imports in October surged 27.7 percent from a year ago to 36,865 tonnes while consumption in the month rose nearly 2 percent on year to 83,000 tonnes. The country’s production in the month fell 32.6 percent on year to 58,000 tonnes as some farmers skipped tapping after prices fell to their lowest level in five years.

⊳ According to International Rubber Consortium, floods in Thailand’s southern province of Nakhon Si Thammarat have disrupted tapping. This province has 1.5 million rai (593,053 acres) of rubber plantations, 3rd largest in Thailand.

⊳ China’s natural rubber imports in October stood at 300000 tonnes.

⊳ Rubber Mark and Market Fed to buy rubber by paying Rs.5 a kg above the Rubber Board rates.

⊳ Inventories in Qingdao, China’s main rubber-trading hub, -3.1% to 139,400 mt: Qingdao International Rubber Exchange Market.

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

TECHNICAL VIEW

RUBBER Dec NMCE

While there exists weakness, a direct fall below 11450 with volumes could intensify the prevailing bearishness. However, as long as 11450 hold down side, pullbacks cannot be ruled out but it is mandatory to break and sustain above 12100 ranges to lessen the prevailing weakness.

Source: Geojit Comtrade