[Geojit Comtrade] Daily report on Natural Rubber: December 6, 2012

MARKET COMMENTARY

RSS4 in the Kottayam market rose for the first time on Wednesday following eight straight sessions of losses. In the spot market, prices rose marginally to Rs.162 a kg from Rs.160 a kg while NMCE rubber futures bounced back nearly one per cent. Even as the trend stays bearish, the recent plunge to more than a two year low might have attracted lower level buying. Firm trend in the overseas market supported the sentiments too. However, with peak production season on, gains are likely to be capped.
A mixed trend is being witnessed in the natural rubber prices in the international market on Thursday. Natural rubber in the major TOCOM and SHFE are seen reversing their initial gains and dipping lower. Weighed down by weak economic indicators from US and Euro Zone amidst US fiscal woes, the benchmark May rubber futures in TOCOM retreated from its seven week high. Yet, optimism over Chinese economic growth and concerns over supplies from Vietnam is likely to provide firm support.

TECHNICAL VIEW

Vietnam, the world’s fourth-largest rubber exporter, may join the International Tripartite Rubber Council of top producing nations, strengthening the group which has agreed to cut shipments to support prices.
US auto sales climbed 15 per cent in November to 1.14 million vehicles.
According to China Rubber Industry Association, China’s total tire output will increase 5.9% to 483m pieces in 2012.
Crude rubber inventories at Japanese ports eased from two month high earlier to 6520 tonnes by November 20 from 6739 tonnes 10- days before, according to Rubber Trade Association of Japan.
Rubber inventories in the warehouses monitored by SHFE rose 3.1 per cent to 93116 tonnes last week.
According to ANRPC, China’s Jan.-Nov. consumption rose 6.7% to 3.51million tonne and its natural rubber consumption this year is anticipated to be 3.83 million tonne from 3.77million tonne.
Rubber stocks held by Thai Govt stand at 170000 tonnes and are expected to rise to 410000 tonnes by March-end.

TECHNICAL VIEW

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In the previous session, prices had bounced backed towards 16800 levels after taking support at the falling trend line support. However, now, continuation of further upsides vests on the ability to sustain 16800 and any such moves are likely to call for 16960/17100 regions or more. Inability to clear the same may call for a dip towards 16500-16400 regions or even more.

Source: Geojit Comtrade

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