NMCE Rubber continues uptrend on fresh buying

NMCE Rubber continues uptrend on fresh buying

NMCE rubber futures continued the gains on fresh buying on 3rd consecutive day on Tuesday. On opening itself prices started trading higher on strong buying interest. Domestic spot market also witnessed good recovery in prices amid limited supply.
TOCOM August futures also traded higher on fresh buying at lower levels and settled at ¥476.00 per Kg. Prevailing rainy conditions in major rubber growing region of Kerala also supported the upside in prices. However, prices took small corrections during the day but overall buying interest pushed the prices up and futures ended the day on higher note.
The rubbers futures are projected to continue the positive trend on fresh buying on Thursday. Taking cues from positive spot market activity prices at futures might remain higher. Rains in major growing region of Kerala might support the prices.
TOCOM rubber August futures are also trading up at ¥482.50 per Kg continuing the previous recovery. Moreover, political tensions in Libya are also easing down which might also support the prices. Thus, on cues from above stated factors rubber futures are likely to continue the recovery today. However, profit booking on gains cane not be overruled.
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
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 are rising while volumes and open interest are falling. Market is running out of traders willing to open or hold an OPEN LONG/BUY. Traders are liquidating both loosing short positions & closing winning long positions. A higher probability the market is set to retrace in price lower at some point.
Japan Futures (TOCOM)
The TOCOM active August contract, prices and open interest are rising while volumes are falling. Market is attracting late buyers & early shorts; market is vulnerable to a sharp correction but likely that that correction will be bought creating a buy point for uptrend.
Shanghai Futures (SHFE)
The SHFE active July contract, prices and open interest are decreasing while volumes are rising. Market is running out of traders willing to open or hold an open Short/sell. Traders are liquidating both loosing long positions & closing winning short positions. A higher probability the market is set to retrace in price lower at some point.



Rubber Declines After Oil Rallied Above $100 Per Barrel
THURSDAY, MARCH 3, 2011 ADMIN

Rubber declined after oil rallied above $100 a barrel, strengthening concern that higher energy costs may stall the global economic recovery.
On Wednesday (Mar 2), the August-delivery contract lost as much as 1.4 percent to 470.6 yen a kilogram ($5,745 a ton) on the Tokyo Commodity Exchange before settling at 475.9 yen. The price reached 455 yen in after-hours trading on Friday (Feb 25), the lowest level since Jan 26.
"Oil's rally is the largest drag on rubber prices as it fueled concern about the global economic recovery," Kazuhiko Saito, an analyst at broker Fujitomi Co, said on Wednesday (Mar 2) .
"Uncertainty about the future of the global economy is resurfacing," said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc.
(People’s Daily Online, March 3, 2011)



Asia Rubber-Tyre makers buy on dips; China eyes Thai grades
THURSDAY, MARCH 3, 2011 ADMIN

* SIR20 traded at $5.19.kg, RSS3 at $6 kg
* China, tyre makers buy at lower levels, TOCOM may rebound
By Lewa Pardomuan
SINGAPORE, March 3 (Reuters) - Bridgestone and Goodyear were in the market for Indonesian tyre grade, while top consumer China chased some cargoes of Thai rubber after prices dropped from record highs, dealers said on Thursday.
SIR20 changed hands at 235 and 235.50 U.S. cents a pound($5.18 to $5.19 a kg) for April delivery late on Wednesday, down from a record of 262 cents traded two weeks ago. Prices of tyre grades have slipped from all-time highs, tracking a correction in Tokyo futures (TOCOM).
"I think there are still a lot of longs out there, who hold rubber at very low prices," said a dealer in Singapore, who mainly trades Indonesian rubber. "These guys will probably keep selling off and depress the market."
Thai RSS3 was traded at $5.99 to $6 a kg, off a record-high at $6.40. Thai STR20 was done at $5.25 and Malaysian SMR20 changed hands at $5.23 a kg. For details on physical prices, click:
China, the world's largest consumer, showed more interest in Thai rubber after the differentials between STR20 and SIR20 narrowed to around 7 cents. The Thai grade was 12 cents more expensive than SIR20 last week.
"China is always waiting for lower prices, and we saw some active buying last week. TOCOM has stabilised a bit, but I guess they will continue top buy albeit in small volumes," said a dealer in Thailand's southern city of Hat Yai.
"When STR20 is on par, or very close to the SIR20, then I would think China will go for the Thai grade."
General Motors Co is expanding the range of cars it sells in China, a step that could help build on its position in the world's biggest auto market as it tries reclaim the No.1 global carmaker spot from Toyota Motor Corp .
In the United States, auto sales surged by 27 percent in February, exceeding the most bullish analyst forecasts as the lure of discounts from auto makers led by General Motors outweighed concerns about higher oil prices for car shoppers.
The most active contract on Tokyo rubber futures, currently August 2011 , was steady at 476.6 yen a kg, having hit an intraday high at 484.8 yen. The contract struck a record around 535 yen in February on persistent worries about supply after bad weather hit producing countries.
"We are optimistic of a price rebound as major producing countries enter the low-production season," Phillip Futures said in a report.
It also pointed to February's auto sales figures for the United States. "This could provide bullish sentiment to the rubber prices."
WEEKAHEAD
Looking ahead, dealers expected supply to remain tight in the physical market due to wintering in Thailand, Indonesia and Malaysia, which could help cushion falls in Tokyo futures.
"I think this is just a healthy correction that we need before the market continues on a bull run. However, the rise will be much slower now. The correction has taken the steam out of it," said the dealer in Singapore.
"China is buying Thai grades but I am sure they may switch back to SIR20 soon."



Tokyo Futures Slip On Worries Of Oil Price Surge On Econ Growth
THURSDAY, MARCH 3, 2011 ADMIN

Tokyo rubber futures edged lower on Thursday (Mar 3) on worries that the unrest in Libya and the broader Middle East could cause global economic growth to slow, shrugging off the favorable impact of soaring oil costs on natural rubber prices.
The key Tokyo Commodity Exchange rubber contract for August delivery was almost flat at 475.5 yen, down 0.4 yen as of 0123 GMT.
"Worries that surging oil prices could hamper the growth of the economy are making invesotrs cautious, though a steep fall is unlikely as heightening supply from producing countries supports the bottom line," Hiroyuki Kikukawa, general manager at trading firm Nihon Unicom, said.
The most active Shanghai rubber contract for May delivery rose 1.5 percent to 39,440 yuan per tonne as of 0128 GMT, up from the settlement price of 38,860 yuan on Wednesday (Mar 2).
Oil rose to settle at its highest level since August 2008 on Wednesday (Mar 2) after an airstrike near Libya's oil infrastructure raised more fears the OPEC nation's oil sector could become a target in embattled leader Muammar Gaddafi's efforts to hold power.
The euro rose to a near four-month high against the dollar on Wednesday (Mar 2) and looked set to extend gains on growing expectations interest rates in the euro zone will rise earlier than those in the United States.
(Reuters, March 3, 2011)



NMCE Members Draw Flak From Exchange in India
THURSDAY, MARCH 3, 2011 ADMIN

The National Multi-Commodity Exchange (NMCE) has come down heavily on the members involved in fraudulent trade practices at the exchange. The exchange has recently issued a circular asking its members to stop indulging in such practices while the move has taken a toll of the turnover at the India's pioneering commodity bourse with a loss of over 80 per cent in past eight trading sessions.
"We have found several members from across the country violating trading rules at the exchange. There are many types of violations by our members. Hence, we had issued a circular to all of them to stop taking up such practices. This has reflected into the fall in the exchange volumes," said Anil Mishra, managing director, NMCE. According to the exchange data, the total volume at NMCE had fallen to 7,772 lots on Saturday (Feb 26) from 67,534 lots reported on Monday (Feb 28), showing a drop of around 88.5 per cent.
The daily turnover at NMCE has suffered a steep loss of over 80 per cent from Rs 20.91 billion on Monday, February 21 to Rs 3.99 billion on Tuesday March 1, 2011 after hitting a bottom of Rs 1.72 billion on Saturday, February 26, 2011.
The market participants have also raised concerns about the severe fall in the trading volumes at the exchange. Meanwhile, the apex market regulator, Forward Markets Commission (FMC) has been constantly noticing the daily movement at the exchange. But so far has not come across with any issues faced by the Ahmedabad-based commodity bourse. "We see the figures regularly. But they have not approached us for any issues so far," said BC Khatua, chairman, FMC.
The trading volumes at the bourse may take some more time to pick up pace. "We have to see how the traders now respond to our circular. We can not predict about the recovery in trading volumes at the exchange," Mishra said.
On Monday (Feb 28), the exchange traded in 20 commodities with NMCE Rubber futures having a volume of 12,168 lots with a turnover of about Rs 3.02 billion. The traded commodities on the exchange continued shrinking during the past one week. On Saturday (Feb 26), the number of commodities traded slipped to six commodities including rubber, copper, silver, guarseed, menthol crystal and gold guinea.
Some of the industry insiders have raised doubts about the management and the transparency of the operations at the exchange. However, on Monday (Feb 28), NMCE witnessed some recovery in the trading volumes.
Five commodities were traded with a total volume of 17,884 lots having a turnover of Rs 3.99 billion.
On Tuesday, March 1, the bourse traded in four commodities, with a the total trading volume of 16,262 lots amounting to a turnover of Rs 3.77 billion, the exchange data showed.
(Business Standard, India, March 3, 2011)



Moderate rise in rubber prices
THURSDAY, MARCH 3, 2011 ADMIN

KOTTAYAM, MARCH 2:
Spot rubber prices improved further on Wednesday.
Dmestic rubber futures market was closed on the National Multi Commodity Exchange owing to Maha Shivratri, the physical market made moderate gains on fresh buying and short covering. Traders seemed to be bullish in all counters as sellers stayed away expecting better rates in the days ahead.
Sheet rubber increased to Rs 227 (223.50) a kg, according to traders. The grade closed firm at Rs 226 (224) a kg both at Kottayam and Kochi, according to the Rubber Board.
RSS 3 (spot) slipped to Rs 274.71 (274.89) a kg at Bangkok. The March futures for the grade finished unchanged at ¥506.0 (Rs 277.79) a kg in the day session but remained inactive during the night session on the Tokyo Commodity Exchange.
Spot rates (RS/kg)were: RSS-4: 227 (223.50), RSS-5: 224 (221), Ungraded: 221 (218), ISNR 20: 224 (223)and Latex 60%: 140 (140).