[Geofin Comtrade] Daily report on Natural Rubber: January 13, 2015

MARKET COMMENTARY

Natural rubber stayed under pressure in the local as well as in the international markets. On Monday, RSS4 grade rubber in the Indian market extended losses, weighed down by apprehensions over demand from the tire sector. However, losses were probably limited as arrival to the market was low despite it being the peak production phase. In the meantime, in the major overseas market on Tuesday, natural rubber declined with SHFE rubber futures falling more than two per cent. On TOCOM, the commodity declined more than one per cent tracking movements in crude oil. Expectations of slowdown in vehicle sales in China and a strengthening yen too weighed on the sentiments.

MARKET NEWS

⊳ Rubber imports by China rise 2.4 per cent to 4.09 million tonnes in 2014

⊳Rubber inventories in the warehouses monitored by SHFE rose 1250 tonnes to 151585 tonnes last week.

⊳According to International Rubber Study Group, global production of natural rubber is to exceed consumption by 77,000 mt this year before narrowing to 51,000 mt in 2016.

⊳China has approved a new standard for compound rubber that reduces the amount of natural rubber allowed in the formula. The new standard, which will cap natural rubber content in the compound to 88 per cent, down from 95-99.5 per cent previously, will be implemented on 01 July.

⊳According to International Rubber Study Group, global natural rubber demand in 2015 is anticipated to increase 3.1 per cent to 12.3 million tonnes.

⊳Thai Prime Minister says government trying to boost natural rubber prices to 65 baht a kg without providing details on ways to prop-up prices.

⊳Natural rubber production in India tumbled 36 per cent in December to 63000 tonnes on YoY basis. Consumption declined as well by 1.8 per cent to 83500 tonnes while imports rose 8.0 per cent during the same time.

⊳Crude rubber inventories at Japanese ports stood at 12,987 tonnes as of Dec. 20, up 15.1 pct from 10 days earlier, data from the Rubber Trade Association of Japan showed.

⊳According to Union Commerce Minister the period for the export of rubber imported under the advanced licensing system has been reduced to six months from the earlier 18 months.

⊳According to media reports, tyre companies have procured about 2400 tonnes of rubber under the new formula implemented by the State government recently.

TECHNICAL COMMENTRY

RUBBER Feb NMCE

As long as support at 12100 ranges holds downside, pullback towards 12550 or more are likely. Slippage past the same may see another round of liquidation to 11900 ranges

Source: Geofin Comtrade