Daily report on Natural Rubber: January 21, 2015

MARKET COMMENTARY

Upticks were witnessed in the local natural rubber market on Tuesday even as the broad underlying trend stayed feeble. Gains seen in the international natural rubber market buoyed the commodity in the local market too though lingering worries over demand continued to weigh on, limiting gains. In the physical market, RSS4 was quoted around Rs.120 a kg in subdued trades while the daily reference price of Rubber Board was Rs.125.10 a kg. On the futures platform too, the grade was seen rising, with the most active February rubber futures gaining over two per cent. In the mean time, natural rubber is seen stretching the previous session advances in the major international market. On Wednesday, TOCOM rubber futures pared initial losses and inched higher. SHFE and AFET rose as well. However, sentiments were muddled. Even as market is heading towards a lean production phase, lackluster demand from China weighed on the sentiments.

MARKET NEWS

⊳Crude rubber inventories at Japanese ports stood at 13,044 tonnes as of Jan. 10, down 2 percent from 10 days earlier, data from the Rubber Trade Association of Japan showed.

⊳Ivory Coast’s natural rubber output for 2014 reached 311,429 tonnes, exceeding a forecast of 296,456 tonnes, the head of the natural rubber association said.

⊳Kerala Chief Minister and Opposition Leader submitted a memorandum before the Prime Minister, urging the latter to take necessary steps to solve the problems faced by rubber sector.

⊳According to International Rubber Study Group, global production of natural rubber is to exceed consumption by 77,000 mt this year before narrowing to 51,000 mt in 2016.

⊳China has approved a new standard for compound rubber that reduces the amount of natural rubber allowed in the formula. The new standard, which will cap natural rubber content in the compound to 88 per cent, down from 95-99.5 per cent previously, will be implemented on 01 July.

⊳According to International Rubber Study Group, global natural rubber demand in 2015 is anticipated to increase 3.1 per cent to 12.3 million tonnes.

⊳Natural rubber production in India tumbled 36 per cent in December to 63000 tonnes on YoY basis. Consumption declined as well by 1.8 per cent to 83500 tonnes while imports rose 8.0 per cent during the same time.

⊳According to Union Commerce Minister the period for the export of rubber imported under the advanced licensing system has been reduced to six months from the earlier 18 months.

TECHNICAL COMMENTRY

RUBBER Feb NMCE

With the breach of the resistance at 12100 in the previous session, it seems some more upsides probably towards 12300 are in store. However, inability to clear the 12300 on consistent basis or slippage past 11930 will again intensify weakness.