[Geojit Comtrade] Daily report on Natural Rubber: April 25, 2014

MARKET COMMENTARY

Rubber prices in the spot market extended weakness amid sluggish domestic demand. Weak sentiments in the international market too weighed down the price trend. Rubber futures on National Multi Commodity Exchange ended down with the most active May contract ending lower tracking the bearish sentiment in the domestic and international market. The benchmark October contract on the Tokyo Commodity Exchange was off its intraday high of 205.8 yen a kg at 202.1 yen per kg, down 1.5 yen from the previous close. The contract has touched an intraday low of 201.7 yen so far today. As well, contract for September delivery on Shanghai Futures Exchange declined 0.4% to 14005 yuan/mt this week. However, dip in prices may be attracting buyers as demand for tyres is expanding globally on rising auto sales.

MARKET

⊳ The Tokyo Commodity Exchange launched a new trading platform on May 7 and added a night session between 0800 GMT and 1400 GMT. For rubber, the evening session is 0800-1000 GMT.

⊳ Brent crude futures rose on Thursday, holding above $109 per barrel for a fifth straight session, as a vow by top oil producer Russia to respond if its interests in Ukraine came under attack stoked supply worries.

⊳ Vietnam April rubber exports estimated at 45,000 tonnes up from 43,000 tonnes same period a year ago, as per the export data released by General Statistics Office. Jan-April exports seen at 196,000 tonnes, down 15% yoy.

⊳ Crude rubber stockpiles held at Japanese warehouses fell 0.2 percent to 22,017 metric tons on April 10, according to data from the Rubber Trade Association of Japan.

⊳ China’s factory activity shrank for the fourth straight month in April, signalling economic weakness into the second quarter, a survey showed on Wednesday, although the pace of decline eased helped by policy steps to arrest the slowdown.

⊳ European car sales jumped 10 in March, advancing 7th consecutive month, according to European Automobile Manufacturer’s Association.

TECHNICAL VIEW

RUBBER May NMCE

Expect to trade with negative bias unless it clears the strong upside resistance of 13950. A direct rise above 13950 could take prices higher, possibly towards 14200. Conversely, a direct dip below 13450 would attract more bears into the counter.

TURNAROUND