Rubber prices on Monday tanked more than 4 per cent amid thin trade, as a surge in Covid-19 infections added to concerns about business activity and overall economic recovery. MCX rubber for April delivery traded Rs 664 or 4.02 per cent down at Rs 15,850 per 100 kg in afternoon deals. Earlier on Monday, it had moved in a Rs 602 range between Rs 15,600 and Rs 16,202 against its previous close at Rs 16,514 per quintal.
The March 31 contract quoted at Rs 16,200, down Rs 551 or 3.29 per cent from its previous close. In the spot market, rubber quoted at Rs 16,157 per quintal at last count, down Rs 187 or 3.30 per cent from its previous close.
Rubber has fallen sharply in the past few sessions, retreating 8.67 per cent from the year’s highest level so far logged on April 5. Yet, it is up 3.16 per cent on a year-to-date basis. “Rubber prices dropped sharply starting amid Covid lockdown-related concerns,” said Ajay Kedia, Founder and Director of Mumbai-based Kedia Advisory.
The aggressively spreading second wave of Covid-19 infections continues to hamper industrial activity, hurting the prices of materials such as rubber, say analysts, though upbeat data from China and a rise in crude oil provided some support. Rubber is currently in a lean production phase characterised with steady demand.
Analysts say the near-term outlook is hazy as the market sentiment appears to be mixed on the commodity. “Ongoing lean production phase and sanguine data may continue to lend support. However, the simmering Covid-19 crisis and the movement in crude oils will influence market direction,” said Anu V Pai, Research Analyst,
Brent crude futures were last seen trading down 0.22 per cent at $66.62 per barrel. Kedia sees rubber taking support near the Rs 15,400 per quintal level where traders can take long positions for a target of Rs 16,500 in next 10-12 days with a stop loss at Rs 15,100.
Going forward, analysts will monitor movement in crude oil and economic data closely to assess the trend in rubber.