NMCE Rubber Intraday Outlook

Commodities Technical Analysis | NMCE Rubber Intraday Outlook | 12 August 2009 | www.commodityonline.com

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Rubber futures in NMCE advanced for a third day, on speculation a rally in crude oil and gains in Chinas industrial production may increase demand for the commodity used in tires amid growing optimism for a global economic recovery.

Futures in Tokyo rose as much as 4.6 percent as crude oil advanced for the first time in four days, boosting the appeal of natural rubber versus synthetic product. China’s industrial production gained 10.8 percent in July, compared with a 10.7 percent advance in June.

In India, the production has seen a 13% fall in the April- June period of the current year as compared to the same period of last year. On the other hand, the consumption of rubber has increased during this period, supporting the bullish price trend.

The imports of rubber stood at 51,000 tonnes on July 9, and that compared with 21,000 tonnes imported during the same period of last year. Exports, on the other hand, stood at just 1,000 tonnes compared to 15,000 tonnes. Lower exports and higher imports have pushed up the stock level to 1.9 lakh tonne by the end of June as compared to 1.4 lakh tonne during the same period last year.

Global rubber consumption is expected to fall 7 percent in 2009 to 20.8 million tonnes, compared with an earlier forecast of an 8 percent fall, according to the secretary general of the International Rubber Study Group on Tuesday. The group forecast that world rubber consumption will grow 2.7 percent in 2010 to 21.4 million tones, compared with a 3 to 4 percent growth forecast he made on March 24.

NMCE rubber moved in the range of Rs10110-10000 last traded at Rs.10069 (9993). Open interest decreased by 96 to 1369. Rubber stocks at NMCE accredited warehouses increased by 15 to 63 Mt.