Panic sales sap spot rubber

Panic sales sap spot rubber
THURSDAY, FEBRUARY 24, 2011 ADMIN

KOTTAYAM, FEB. 23:
Physical rubber prices fell further on Wednesday. Sharp declines on the National Multi Commodity Exchange kept traders under pressure during early trades but prices managed to sustain at the prevailing levels following a partial recovery in domestic futures. RSS 4 was hit badly as buyers stayed back letting the grade to fall freely on an almost panic selling from dealers and growers.
Sheet rubber nosedived to Rs 230 (237) a kg, according to traders. The grade declined sharply to Rs 231 (238) a kg both at Kottayam and Kochi, as quoted by the Rubber Board.
RSS 4 surrendered at its March series to Rs 229.20 (232.56), April to Rs 239.01 (241.89), May to Rs 245.50 (247.91), June to Rs 250.36 (253.36) and July to Rs 252 (254.66) a kg on the NMCE.
The March futures weakened to ¥514.4 (Rs 280.94) from ¥521.8 during the day session but then recovered to ¥521.6 (Rs 284.85) a kg in the night session on the Tokyo Commodity Exchange. RSS 3 (spot) slipped to Rs 289.31 (292.05) a kg at Bangkok.
Spot rates were (Rs/kg): RSS-4: 230 (237); RSS-5: 225 (230); ungraded: 220 (225); ISNR 20: 230 (238) and latex 60 per cent: 145 (146).




Natural rubber prices fall by Rs 7 in the domestic markets
THURSDAY, FEBRUARY 24, 2011

New Delhi, Feb 23 (PTI) Natural Rubber prices today fell by Rs seven to Rs 231 per kg in the domestic market due to fall in the prices in the International and domestic future markets.
The prices of natural rubber yesterday at the Kottayam market were ruling at Rs 238 per kg.
"Fall in prices of rubber in the international market, Tokyo Commodity exchange (TOCOM) and in the domestic market has affected the prices in the physical markets here," Indian Rubber Dealers Association President George Valy told PTI.
"Internationally there is lot of voltality in the prices of rubber," Valy added.
Prices of natural rubber in the Bangkok market closed at Rs 289.31 per kg as against Rs 292.05 per kg yesterday.
"The prices in the domestic future markets have been affected due to a fall in the prices in TOCOM," National Multi Commodity Exchange Chief Executive Office Anil Mishra told PTI.
"The prices of rubber at Shanghai, the largest consumer, have also fallen as the demand from China is declining and this has again affected the prices," Mishra added.




A Correction Period Has Come But Is Short Lived
THURSDAY, FEBRUARY 24, 2011 ADMIN
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Tokyo rubber futures retreated consecutively during 21 - 22 February after hitting a fresh record high as market players took profits last Friday, and Shanghai rubber futures retreated ahead of the latest raise in the bank reserve requirement ratio of 0.5 percentage points by the People’s Bank of China.
Geopolitical tensions in the Middle-East and North Africa, especially in Libya, are now pushing up oil prices worldwide, and we will see tug-of-war between the greenback and commodity prices, crude oil futures in particular, for the time being.


Furthermore, it is too early to predict whether natural rubber (NR) production this year will be up or down, comparing with the previous year because we are only in the second month of the year. Even though there are additionally mature NR planted areas to be tapped this year, persistently erratic weather still slows normal production. Overexploitation of rubber trees is also another factor that should not be ruled out.
Due to the above mentioned reasons, market correction is likely to continue for a certain period of time, and steady NR demand from tire and non-tire manufacturers should be taken into account as J.D. Power and Associates said on 15 February that global auto sales would increase 6.0% in 2011 to a record 76.5 million new light vehicles.



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NMCE Rubber continues downtrend on global cues
THURSDAY, FEBRUARY 24, 2011 ADMIN
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NMCE rubber futures continued the bearish trend on active selling for 4th consecutive session on Wednesday. On opening itself prices traded down on heavy selling pressure. TOCOM rubber futures also traded down on active selling. However, settled on slightly positive note to ¥ 507.40 per Kg. on short covering at previous losses.
Thus, taking cues from positive closing of TOCOM futures NMCE rubber prices showed small recovery but failed to sustain the gains and fell drastically. Domestic spot market also reported a fall of `700 per quintal in a single day. Thus, on cues from domestic and international market NMCE rubber futures ended on negative note.
The rubbers futures are projected to extend the bearish trend today on negative cues from domestic market. However prices are likely to resume upside on short covering taking cues from TOCOM futures. TOCOM rubber July futures are trading slightly positive at ¥ 489.40 per Kg. on short covering on lower levels. Moreover, increasing Middle East concern might weigh on prices. Thus on cues from above stated factors NMCE rubber futures are projected to trade range bound to lower today.
Factors to Watch For
The stock of natural rubber in the country till January 30, 2011, is estimated at 3,27,115 tons, according to chairman of Rubber Board of India
According to the Rubber Research Institute of Thailand, the physical price of Thai rubber dropped 0.9 percent to 195.80 baht ($6.42) a kilogram yesterday
People’s Bank of China has increased the interest rate by 50 basis which is pressurizing the rubber prices as China is the largest consumer of natural rubber
Natural-rubber inventories monitored by the Shanghai Futures Exchange is reported around at 58,058 tons, which is down by 62 % from last year’s highest inventory levels of 151,832 tons
According to the Association of Natural Rubber Producing Countries, Natural-rubber consumption in China and India may rise 9 percent to 3.6 million tons this year and 5.2 percent to 991,000 tons respectively
According to Passenger Car Association, passenger-car sales increased 16.2 percent Y/Y to 1.53 million last month
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February contract, prices and open interest are falling while volumes are rising. It is a good indication that heavy short selling is happening in market. However, traders are exiting their positions towards the end of the day winning short positions and loosing long positions. Market might remain volatile to down in short term
Japan Futures (TOCOM)
The TOCOM active June contract, prices, volumes and open interest all are falling. If the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions. Technicians view this scenario as a strong position technically because the downtrend will end as all the sellers have sold their positions, creating fresh buying opportunity at lower levels.
Shanghai Futures (SHFE)
The SHFE active June contract, prices and volumes are falling while open interest is rising. It is a good indication that a sharp rally against downtrend will develop creating a sell point for downtrend.