Friday, July 24, 2015

Trend may continue to next week

The key $50 price support for WTI oil has been broken (US$48.14 a barrel). Crude oil is struggling for any upside gain and experienced another depraved week as the inventory data reminding about the extra oil glut on the market. Chinese, world’s second-largest consumer of oil, disappointed markets with its manufacturing data. Will the current downturn be as severe as the one in 1986 and the current curve of oil prices is suggesting that there will be little recovery in the coming years.

Benchmark Tokyo rubber futures decline in two weeks, dragged lower by weak Shanghai futures following sluggish Chinese factory activity data. Tokyo Commodity Exchange futures, which set the tone for tyre rubber prices also came under pressure from oil prices closing at their lowest in months a day earlier. National Multi Commodity Exchange (NMCE) Rubber August contract traded with bearish sentiments on selling pressure from traders and this trend is likely to continue in next trading session as well.

The benchmark RSS4 grade rubber closed at `.124.50 a kg at Kottayam, while RSS3 grade closed at `.106.02 a kg at Bangkok and Malaysian SMR20 closed at `.90.79 a kg. On National Multi Commodity Exchange August 2015 futures closed at `.123.05 a kg, September at `.123.23 and October at `.123.05 a kg. On Tokyo Commodity Exchange, July 2015 futures series closed at ¥200 a kg, August at ¥198.5, September at ¥200.5, October at ¥203.3, November at ¥206.1 and the contract for delivery in December 2015 closed at ¥208.6 a kg.

To read Rubber4U – 1st August 2015 issue:

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