Rubber prices likely to remain bearish
The latest report of The Association of Natural Rubber Producing Countries (ANRPC) said the increasing worries of global recession will continue to dominate the sentiments of natural rubber (NR) market during April 2020.
Natural rubber prices are likely to remain bearish in April despite it being a lean season as the consumption is expected to be muted. On the Indian Commodity Exchange (Icex), the April contract for delivery has fallen nearly 20% in the past six weeks and was hovering around ₹116.70 per kg on Tuesday evening. Physical trading came to a halt on March 23 after a lockdown was declared.
“We expect another 5% decline in rubber futures on Icex if crude oil prices start falling as predicted,” said Kunal Shah, head of commodities research, Nirmal Bang. The latest report of The Association of Natural Rubber Producing Countries (ANRPC) said the increasing worries of global recession will continue to dominate the sentiments of natural rubber (NR) market during April 2020.
Other negative factors pointed out by the report are the longer time required by the auto tyre sector in China to return to normalcy, low crude prices and the possibility of speculative investors and hedge funds to stay away from the commodities, including rubber, as global economy remains in risk.
“Technically, we see NR prices dip to ₹100 per kg and possibly lower in the short-term, before prices find a potential bottom whereas on the upside, a strong sustained activity over key resistance at ₹12,500.0 could trigger a reversal in prices,” said Akshay Agarwal, MD, Acumen Capital. The ANRPC report said the world consumption of natural rubber fell 19.6% year on year.