Daily report on Natural Rubber: September 21, 2012

MARKET COMMENTARY

• In tandem with movements in international market, natural rubber prices in the domestic market retreated from its highest since mid-April. NMCE rubber futures dropped nearly two per cent on Thursday while quotes for the RSS4 grade rubber edged lower to Rs192 a kg. Latex (drc60%), however, continued to inch higher. Meanwhile, the sharp swings in natural rubber prices being witnessed in the futures market have raised many eyebrows and major natural rubber consumers are calling for curb in volatility.
• As this week’s session is coming to an end, natural rubber prices in the international market are bouncing back on Friday. TOCOM rubber futures gained nearly two per cent buoyed by gains in crude oil and other commodities. However, worries over global economic growth weighed on the sentiments. Moreover, investors are likely to remain cautious ahead of the week long holiday in China starting this month-end.

MARKET NEWS

• The global natural rubber surplus was about 275,000 metric tons at the end of August, according to Daud Husni Bastari, chairman of the Rubber Association of Indonesia.
• The Philippine government is targeting to increase rubber production in the country by turning 200,000 hectares of land into rubber plantation by 2016.
• Thailand Government approved the $30 billion rubber market intervention plan on Tuesday.
• Natural rubber production in India edged higher by 2.5 per cent to 73000 tonnes in August on a year on year basis while consumption rose nine per cent to 83000 tonnes during the same period.
• Rubber inventories in the warehouses monitored by the SHFE rose 10.6 per cent to 42296 tonnes the previous week.
• 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.

TECHNICAL VIEW

RUBBER Oct NMCE

Slippage past 18900 region in the previous session have dimmed the prevailing positive bias. Now, 18500 seems to be a considerably strong support region, if held may see a bounce back towards 18940-19100 region. However, direct fall below 18500 with considerable volume may puncture the positive sentiments and may call for 18200 followed by 18050-17800 levels.

Source: Geojit Comtrade

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