Daily report on Natural Rubber: September 13, 2012

MARKET COMMENTARY

• Bullish sentiments prevailed in the domestic natural rubber market and RSS4 grade rubber mounted to seven week high in the ready market on Wednesday, buoyed by limited arrivals and sharp rises seen in the major international market. Meanwhile, NMCE rubber futures surged to its highest since early July, culminating the session more than three per cent up. Even as natural rubber prices have now moved to a greener turf, factors like export cuts by the top producers and persisting wide difference between quotes prevailing in the local and international market will support the sentiments, yet the upcoming peak production season in Kerala is likely to cap gains.
• On Thursday, natural rubber prices in the global market are seen taking a breather after the rally as investors turned cautious ahead of the US FOMC rate decision. TOCOM rubber futures softened from seven week high though optimism over further stimulus from US and China provided firm support.

MARKET NEWS

• India’s natural rubber consumption rose five per cent to 4.20 lakh tonnes in April-August 2012 on YoY basis while production showed only a marginal rise of 0.8 per cent to 331700 tonnes during the same period. Imports dropped 17 per cent on a year to 14870 tonnes in August on reduced imports by the tyre manufacturing industry.
• According to Indonesian Rubber Association, natural rubber output in the country is likely to decline 10 per cent to 2.8 million tonnes on YoY basis in 2012.
• According to Japanese weather bureau, the weather phenomenon ‘El Nino’ is under way and is likely to last until winter.
• Indian vehicle sales dropped four per cent in August with car sales declining 19 per cent and two wheelers recording a negative growth for the first time in over three and a half years.
• Malaysia and Thailand seeking the possibility of developing a large-scale rubber and rubber-industry based development to stabilise natural rubber prices.
• Natural rubber imports by China rises 23.5 per cent in August to 210000 tonnes on month on month basis.

TECHNICAL VIEW

RUBBER Oct NMCE While the positive bias currently being witnessed remain intact, prices are likely to face stiff resistance at 18500, once successfully cleared may call for 18900 region in the near term. However, inability to clear the same may call for a brief lower correction towards 18150-18040 before resuming its uptrend. Unanticipated fall below 17800 would puncture the prevailing rally.

Source: Geojit Comtrade

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