MUMBAI, March 22 (Reuters) - Indian rubber prices continued last week' rally to hit new record highs on Monday, but profit-taking and tapering demand may take some sheen off this week, analysts said.
At 4:38 p.m., the benchmark April contract NMRUJ0 on the National Multi-Commodity Exchange (NMCE) was down 0.6 percent at 15,640 rupees per 100 kg.
The contract hit a record peak of 15,834 in early trade on Monday, the highest level for near-month contract since futures trade was introduced in 2003.
"Futures are in corrective mode. We can see some profit-taking this week," said Shiji Abraham, analyst with JRG Wealth Management.
The spot price of the most traded RSS-4 (ribbed smoked sheet) rubber hit a record high of 15,450 rupees in Kottayam, Kerala, as per data compiled by the Rubber Board. Usually rubber supplies shrink in summer season in India.
"Price may see a 200-300 rupees (per 100 kg) correction. But I am not expecting sharp correction because of a lower production," said a spot trader based in Kochi, Kerala.
In 2009/10, output in the world's fourth biggest producer is expected to drop 4 percent to 830,000 tonnes from 864,500 tonnes a year ago. See [ID:nSGE6240E6]
India's top tyre firms are reluctantly holding prices, risking a hit on profit margins, despite a recent surge in input costs as they wait for prices of natural rubber to stabilise from a current record high. See [ID:nSGE6270GS]
Tyre makers consume about 60 percent of total rubber output.
(in.reuters.com)
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