The Hindu Business Line : Rubber seen heading north

THE physical rubber market was steady during the initial days of the week on buyer resistance even if the fundamentals were strong enough to generate a sharp rise in prices. The growers also kept off expecting the domestic market to follow the international trend as the Bangkok market quoted at Rs 56.01 on Tuesday against Rs 54.64 on Monday.

On Wednesday, the covering groups who normally operate on behalf of the major manufactures came in with better offers and the market moved up breaking the resistance at Rs 50. Sheet Rubber RSS 4 that opened at Rs 49.50 per kg on Monday closed at Rs 51 on Friday. The week witnessed widespread gains over all grades. Later, the buyer resistance continued to hold on the rates on Friday.

Opening strong on Monday, rubber futures staged a spectacular show over the week. NMCE rubber futures closed registering a record turnover of 3346 lots on last Friday. The benchmark February contract ended at Rs 56.73 per kg and a continued accumulation in January futures took the net open position to 2361 lots, up by 16.47 per cent against last Friday.

In the international scenario, the bullish fundamentals which are unlikely to change overnight might keep the rally intact at least till December. Though, Europe and US buyers are active, China is expected guide the market to explore new highs in the immediate future

The spot rubber market strengthened to close above the critical resistance at Rs 50 in the preceding week. Therefore, technically this level would support the market in the succeeding weeks and the growing demand and low supply might continue to fuel rubber prices to seek higher levels.

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