MARKET COMMENTARY
Natural rubber jumped in the international market on Tuesday as worries over supply gripped the market. SHFE rubber futures gained more than four per cent while TOCOM rubber futures advanced over three per cent to hit a four month high as floods in Thailand and Malaysia stoked concerns over supplies. AFET rubber futures gained as well. In the mean time, RSS4 in the Indian market are trading firm. In the physical market, the grade was quoted around Rs.128 a kg. While dips were witness on NMCE on Monday, it remained in the vicinity of the four month highs. Sharp upsides being witnessed in the major overseas market are likely to lend support amidst the measures announced by the local government to prop up prices.
MARKET NEWS
⊳According to International Rubber Consortium, natural rubber production from Malaysia and Thailand is to drop at least 30 per cent if floods in Northern Malaysia and Southern Thailand persist.
⊳Vietnam’s rubber exports stood at 108000 tonnes in November and expect 2014 exports to be at 1.07 million metric tonnes according to country’s Ministry of Agriculture and Rural Development.
⊳Rubber inventories in the warehouses monitored by SHFE rose 0.8 per cent 154086 tonnes last week.
⊳According to Indonesian Rubber Association, natural rubber exports from the country is likely stay unchanged from the current levels at 2.5 million tonnes in 2015
⊳China to raise the cap for rubber import tariff to 1500yuan a tonne from the present 1200 yuan a tonne with effect from January 01.
⊳According to Thailand’s Office of Agricultural Economics estimates, natural rubber production from the country is expected to rise 2.6 per cent to 4.43 million tonnes as tapping area rose 5.9 per cent.
⊳SHFE has notified the launch of Continuous Trading Program for various commodities including natural rubber from 26 Dec onwards. Continuous trading hours for natural rubber are 9:00pm-11:30pm Beijing time from every Monday through Friday. There will be no continuous trading on business day prior to national holiday (excluding weekends.
⊳The Kerala government today approved a formula to help rubber farmers after holding discussions with 12 tyre manufacturing companies in the country. As per the formula, companies would purchase natural rubber at a price fixed by Rubber Board considering the international price of natural rubber plus 20 per cent customs duty and five per cent purchase tax.
TECHNICAL COMMENTRY
RUBBER Jan NMCE
A consolidation has been in progress after the recent rally. To continue the buying momentum, it is mandatory to break and sustain above 12750 with volumes. Else, corrective dips may extend and slippage past 12200 ranges could dilute the present momentum.
Source: Geofin Comtrade
