MUMBAI, May 10 (Reuters) - Indian rubber futures, which hit upper circuit on Monday, are likely to trade in a narrow range this week as higher arrivals and production are seen offsetting good spot demand from tyre makers, analysts said.
"In physical markets in Kerala arrivals are gradually rising. Production is also expected to be on higher side," said Shiji Abraham, analyst with JRG Wealth Management.
India's rubber production is likely to rise 7.5 percent to 893,000 tonnes in 2010/11 helping reduce costlier imports, a senior Rubber Board official said last month.
"Tyre markers are increasing purchases due to sharp drop in prices," Shiji said.
Spot price of the most traded RSS-4 rubber (ribbed smoked sheet) has fallen over 11 percent since hitting a record high of 17,000 rupees per 100 kg in Kottayam, Kerala, on April 16, Rubber Board data showed. It rose by 200 rupees to 15,100 rupees on Monday.
The benchmark June contract NMRUM0 on the National Multi-Commodity Exchange (NMCE) provisionally closed up 4 percent at 15,303 rupees per 100 kg.
Tokyo rubber futures rose 2.6 percent on Monday, snapping a five-day falling streak as a weaker yen and a jump in oil prices gingered up investor sentiment, while China was said to have bought rubber last week.
(Reporting by Rajendra Jadhav; Editing by Ramya Venugopal)
(in.reuters.com)
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