Daily report on Natural Rubber: August 17, 2012

MARKET COMMENTARY

-  Riding high over the reports of exports curbs from the top three natural rubber producing countries, a sharp rebound in natural rubber prices from its 21 month low was witnessed in the Indian market on Thursday. NMCE rubber futures bounced back gaining nearly four per cent while RSS4 was quoted higher in the spot market. An attempt by the major natural rubber producing countries to trim exports is likely to raise the demand for the local produce though the stocks are deemed to be high. Moreover, there has been occasional disruption in tapping owing to heavy rains in the major rubber producing areas in Kerala.

-  Natural rubber prices were seen extending the previous session gains on Friday. Apart from attempts by Thailand, Indonesia and Malaysia to prop up dwindling natural rubber prices, comments by the German Chancellor to support Euro provided additional support.

MARKET NEWS

-  In the latest attempt to prop up natural rubber prices, top three natural rubber producing countries, Thailand, Indonesia and Malaysia, have agreed to cut down rubber trees and trim exports by 300000 tonnes.

-  Natural rubber production in Malaysia climbed 22.9 per cent in June to 85866 tonnes on a month on month basis, however, only a marginal rise of 0.6 per cent was recorded on year on year basis.

-  Japan’s weather agency says ‘El Nino’ phenomenon has already emerged and is likely to last until winter.

-  Rubber inventories in the warehouses monitored by SHFE rose 21.8 per cent to 26316 tonnes the previous week.

-  China’s natural rubber imports in July at 170,000 metric tonnes, 6.3 per cent up on MoM basis.

-  Natural rubber production in India rise 2.6 per cent to 66,000 tonnes in July on YoY basis. Consumption increases slightly to 83,000 tonnes while imports fall to 17084 tonnes from 19928 tonnes during the same period last year.

-  Apollo Tyres considering investing Rs.300 crores in Kalamassery unit, Kerala to set up an export –oriented unit.

TECHNICAL VIEW

 RUBBER Sep NMCE

Even though the strong rebound seen during the previous session has diluted the broad weakness, 17080 pose to be the immediate resistance, if cleared successfully, may see an extension to the current buying momentum towards 17250. However, 17250 hold the key to further positive moves. Inability to clear 17080 may see a lower correction towards 16740 or more to 16580. Slippage past 16450 should be viewed with caution.

Source: Geojit Comtrade

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