MARKET COMMENTARY
Sentiments stayed feeble in local natural rubber market on Thursday. NMCE rubber futures culminated the session in red, barring the expiring January rubber futures on the bourse that ended about 2.5 per cent higher. In the physical market too, RSS4 grade rubber was quoted lower in lackluster trades. In the major overseas market, meanwhile, a mixed trend is being witnessed as the week’s session culminated. On Friday, TOCOM rubber futures resumed to decline while SHFE rubber futures inched up. Strengthening yen weighed on the sentiments as investors are assessing the demand from China ahead of upcoming Chinese New Year holidays. China usually restocks commodities ahead of the New Year holidays. However, reports points towards a lethargic demand from the country.
MARKET NEWS
⊳ Ivory Coast’s natural rubber output for 2014 reached 311,429 tonnes, exceeding a forecast of 296,456 tonnes, the head of the natural rubber association said.
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⊳Kerala Chief Minister and Opposition Leader submitted a memorandum before the Prime Minister, urging the latter to take necessary steps to solve the problems faced by rubber sector.
⊳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.
TECHNICAL COMMENTRY
RUBBER Feb NMCE
Indecisive moves were witnessed in the previous session. Prices are currently hovering near the 50 day SMA of 11932 and sustained trades below the same could see another round of liquidation. However, a direct rise above 12000 ranges will invite some short covering.
Source: Geofin Comtrade
