Rubber prices likely to touch Rs 17240: Geojit Comtrade

According to the Indonesian Rubber Association, the nation will start cutting exports in the fourth quarter of this year. Of the 300000 tonnes cut in exports as planned by the top three natural rubber producing countries, Indonesia’s share account for 100000 tonnes.  Area under rubber cultivation in Indian rises 3.6 per cent in 2011- 12 over previous year. Thailand’s Farm Minister says, the top three natural rubber producing countries to hold talks with Vietnam with an aim to work jointly to stabilise natural rubber prices. He also added that export cuts may be expanded if existing measures fail to impact prices. According to the Association of Natural Rubber Producing Countries, natural rubber production from key growers may expand 4.7 percent in 2012 from last year to 10.83 million metric tons.

According to data from the Rubber Trade Association of Japan, crude rubber stockpiles held at Japanese warehouses fell 7.6 percent to 7,387 metric tons on Aug. 20.  Production in the Apollo Tyres unit in Kalamessery that was suspended following a fire break out is likely to be resumed in next few days.

While the broad trend remains weak, support region of Rs16800-16700 if held downside, could see a brief bounce back to Rs17060 or more to Rs17240 followed by a turn lower. However, it requires breaking and sustaining above Rs17240 for upsides towards Rs17400 or more. On the other hand, slippage past 16700 is likely to attract further selling pressure probably towards Rs16580-16450 levels.

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