Daily report on Natural Rubber: August 9, 2012

MARKET COMMENTARY

• Amidst weak fundamentals, steep plunges in the international market, dragged down natural rubber prices in the Indian market. NMCE rubber futures dwindled, with the most active September rubber futures hitting weakest level since September 2010, shedding nearly three per cent. In the physical market, RSS4 was quotes at its lowest in around 21-months. While demand stays subdued, imports high and economic outlook murky, expectation of higher production owing to weak monsoon is likely to keep market under pressure.
• On Thursday, a mixed trend is being witnessed in the natural rubber prices in the international market. Prices are swinging between positive and negative turfs as investors await industrial production and other economic numbers from China. While Chinese inflation report that released earlier today helped slightly, the overall sentiments remained on the weaker side. TOCOM rubber futures are hovering near three year low levels.

MARKET NEWS

• China’s consumer prices index better than anticipated; falls to a 30-month low in July.
• According to International Rubber Study Group, global demand for both natural and synthetic rubber is seen rising four per cent to 27.7 million tonnes in 2013 on a year on year basis. However, the Group revised down the demand estimates for 2012 to 26.6 million tonnes from earlier estimates of 26.8 million tonnes.
• Indonesia’s first-half rubber exports fell 8 percent from a year earlier to 1.2 million tonnes as the debt crisis in Europe cut demand, Asril Sutan Amir, chairman of the nation’s rubber association.
• Crude rubber stockpiles held at Japanese warehouses fell 9.4 percent to 9,308 metric tons on July 31, according to data from the Rubber Trade Association of Japan.
• Rubber inventories in the warehouses monitored by the Shanghai Futures Exchange declined 2.2 per cent to 19140 tonnes last week.
• Tyre grade rubber in Southeast Asia was trading at its lowest in at least four years and China is likely to step up purchase to exploit the low prices.

MARKET NEWS

RUBBER Sep NMCE

The strong sell off witnessed in the previous session were held near 16700 region in the previous session. The trend continues to remain extremely bearish and is likely to penetrate the 200-week moving average which is currently placed near 16398 in the near term. Yet, indicators have moves to an over sold situation and may call for brief pullbacks towards 16940-17080, but such correction rallies extending beyond 17250 regions should be viewed with caution.

Source: Geojit Comtrade

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