NMCE Rubber slumps on selling pressure

NMCE rubber futures extended the losses on strong selling interest on Monday. On opening itself prices started trading down on continued selling pressure. Domestic spot market also extended bearish trend on sluggish demand.
Rubber futures at TOCOM also witnessed a sharp fall and ended the day at ¥343.00 per Kg. News of tsunami in Japan weighed on sentiments and prices in all rubber market across the world fell drastically on huge selling pressure and futures at NMCE ended in 4% lower circuit.
The rubbers futures are projected to continue the bearish trend on global cues on Tuesday. TOCOM August rubber is also trading down at ¥384.10 per Kg on active selling. Domestic spot market at Kochi and Kottayam also witnessing the same down trend. Thus, on cues from negative international market prices at NMCE plat form may trade on lower note.
Factors to Watch For
Rubber spot market of Kochi fell below `20,000 per quintal yesterday taking cues from global rubber market sentiments
Prices are likely to continue the bearish trend as demand from Japan a major rubber importer will decline because due to power supply disruption in Japan has caused production halt by auto manufacturing companies
According to rubber board of India, Indian February Natural Rubber Output is 54,500 Tons Vs 51,500 Tons, consumption is 79,000 Tons Vs 76,350 Tons and imports are 6,831 Tons Vs 12,278 Tons
As per data released by rubber board, the year end deficit in natural rubber in India is estimated around 1.2 lakh tons and it is expected to be increase to 2 lakh tons during 2011-12
According to the Rubber Research Institute of Thailand, physical price of Thai rubber shed 1.5 percent to 189 baht ($6.18) a kilogram Monday
According to the Association of Natural Rubber Producing Countries, Consumption in China, India and Malaysia, representing 48% of global usage, will increase this year
According to China Passenger Car Association, Sales of passenger cars and minivans declined 0.4 percent from a year earlier to 880,027 last month
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE March contract, prices, 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.
Japan Futures (TOCOM)
The TOCOM active August contract, prices are falling while volumes and open interest are rising. If prices are in a downtrend and open interest is on the rise, chartists know that new money is coming into the market, showing aggressive new short selling. This scenario will prove out a continuation of a downtrend and a bearish condition.
Shanghai Futures (SHFE)
The SHFE active July 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.