Daily report on Natural Rubber: January 22, 2015

MARKET COMMENTARY

Natural rubber prices dipped in the Indian markets on Wednesday after rising a day earlier. NMCE rubber futures pared initial gains and ended about 0.5 percent lower while quotes for RSS4 in the physical market dipped to Rs.119 a kg. Lackluster demand continues to hamper overall market sentiments, though gains in the major overseas market is buoying prices. Meanwhile, the commodity is seen rising in the international market on Thursday. TOCOM rubber futures rose nearly two percent, while the most active May rubber futures on SHFE advanced three per cent ahead of the European Central Bank monetary policy announcement. Overnight gains in crude oil and forthcoming lean production phase in the top natural rubber producing countries lend support.

MARKET NEWS

⊳ The National Council for Peace and Order (NCPO) and the government will instruct the Government Savings Bank and Krung Thai Bank to provide business operators with soft loans worth 25 billion baht ($768 million) to buy natural rubber from farmers, the Bangkok Post reported, quoting Deputy Prime Minister and Defence Minister Prawit Wongsuwon.

⊳ The United States is set to slap more duties on imports of tires from China after the Department of Commerce determined they were sold too cheaply in the United States.

⊳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.

TECHNICAL COMMENTRY

RUBBER Feb NMCE

Inability to clear the considerably strong resistance of 12300 saw a retreat towards 12000 ranges. Looking ahead, it is mandatory to clear the resistance at 12300 to continue the positive moves possibly towards 12550. As long as 12300 stays undisturbed corrective dips may stretch to 11930 and slippage past the same could intensify weakness.