[Geojit Comtrade] Daily report on Natural Rubber: October 22, 2012

Japanese Rubber Futures Rally On Shanghai Gains

MARKET COMMENTARY

Natural rubber market was seen trending lower the previous week. Attempts to move higher were overshadowed by the underlying weak market fundamentals. NMCE rubber futures posted losses for the third successive week, while in the spot market RSS4 slipped towards a six week low. With this decline, the gap between natural rubber prices in the local and international market have considerably narrowed down, yet Indian RSS4 continues to be on a premium to both SMR 20 and Bangkok RSS3. In the mean time, the North-East monsoons have set over Kerala that is likely to provide cushion to the falling prices.
Global economic growth worries and concerns over demand from China continued to haunt the market. Natural rubber prices are seen declining in the international market on Monday. TOCOM rubber futures dropped to a three week low.

MARKET NEWS

Chinese economy growth slows down for the seventh consecutive quarter. Third quarter GDP rise 7.4 per cent as anticipated and industrial production increase 9.2 per cent against the estimates of 9.0 per cent in September.
Chinese Academy of Tropical Agricultural Sciences says China plans 14000ha of new rubber planting and replant 10000ha of old rubber trees in next five years.
According to ANRPC, rubber production among its member countries may increase to its highest level in at least nine years to 11.1 million metric tonnes in 2013.
NCDEX have introduced changes in packing method for rubber and delivery shall be in 50kg bales packed with polythene sheets
Natural rubber imports by China remain unchanged on month on month basis. The country imported 210000 tonnes of natural rubber in September. However, on year on year basis, the imports showed a decline of 12.5 per cent.
According to Rubber Board, natural rubber production in India rose 2.2 per cent in September to 82000 tonnes while consumption increased by 8.9 per cent to 81500 on YOY basis.

TECHNICAL VIEW

RUBBER Nov NMCE

Further weakness have been induced with the break of 17900 in the previous session. Yet, there is a minor trend line support near 17700, which if breached convincingly could call for 17570 or more to 17400/17240. Alternatively, a pullback towards 18050 or even higher to18300 regions may be seen if 17700 is held downside.

Source: Geojit Comtrade

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