Rubber prices outlook: Rubber climbs 1-month peak; analysts see 9% upside: Time to take positions?

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Prices of rubber, an industrial commodity, jumped on Tuesday to the very best stage in almost a month amid provide scarcity, including to a rebound that started final week as agency demand together with optimistic cues within the worldwide market boosted sentiments of market individuals.
rubber futures due for supply on May 31 traded 1.52 per cent (Rs 254) greater at Rs 17,010 per tonne, having touched Rs 17,050 per tonne earlier on Tuesday – a stage final seen on April 7.

Analysts stated the commodity is about for greater ranges forward basically on account of tight provides, thanks to demand from industries corresponding to vehicles and healthcare.

“Increased demand for rubber gloves and packaging tapes during the pandemic has resulted in tightening of natural rubber supply… Global rubber supply is already running short due to stockpiling by China, while US auto manufacturers are rushing to secure shipments before the market gets squeezed further,” stated NS Ramaswamy, Head of Commodities at Ventura Securities.

India is the world’s second largest shopper of pure rubber, behind China, and the sixth largest producer.

Rubber prices have risen round 10 per cent up to now this yr and a few see upside potential of an extra 9 per cent going ahead.

Time to take positions?
Ajay Kedia, Founder and Director of Kedia Advisory, has a optimistic outlook on pure rubber with the value set to take a look at Rs 17,050-17,300 ranges within the subsequent one month.

Ramaswamy recommends shopping for the near-month contract above Rs 17,350 for a goal of Rs 18,500 with a cease loss at Rs 16,500. “Technically, we expect MCX rubber to trade sideways over the next few weeks (Rs 17,350-Rs 15,500) with a possible breakout on either side,” he stated.

The street forward
Natural rubber is anticipated to commerce agency within the week forward, however disruptions on account of pandemic-related points can be tracked carefully for cues, stated one analyst.

“Consecutive holidays in major international natural rubber markets and key economic data releases from the US and China will weigh on prices,” stated Anu V Pai, analysis analyst at

.

Market individuals may also monitor updates on manufacturing exercise keenly for cues on rubber prices. Analysts say any destructive information from the sector could have an effect on demand for the commodity.

“A correction in crude oil rates would drag the rubber prices lower,” stated Ventura’s Ramaswamy.

Meanwhile, Brent futures traded greater than 1 per cent stronger at $68 a barrel finally replace. The oil benchmark has appreciated 32 per cent up to now this yr.

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