NMCE rubber futures traded higher on active fresh buying on Wednesday. Futures started the day on positive note on active buying spot market activity also supported the upside.
TOCOM futures also traded higher on supply concern. Rising crude oil prices on Egyptian issue further added to the upside side. Thus, overall increasing demand amid supply shortage supported the prices and futures ended on higher note.
The rubbers futures are projected to extend the bullish trend today on positive cues from TOCOM futures. TOCOM rubber July futures are also trading higher at ¥ 526.70 per Kg. on active buying interest.
However, good domestic demand might support the trend on fresh buying during the day. Emerging demand from tyre industry is also supporting the prices at domestic spot market. Thus on cues from above stated factors NMCE rubber futures are projected to trade higher today.
Factors to Watch For
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 Rubber Research Institute of Thailand, The physical price of natural rubber in Thailand, the world’s largest exporter, extended gains to an all-time high of 195.80 baht ($6.38) per kilogram yesterday
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
Rubber futures at TOCOM has gained by 23% this year on rising supply shortage due to heavy rains and floods in Thailand and other Asian countries
According to Passenger Car Association, Passenger-car sales in China in January rose 15.3 percent from a year earlier to 1.4 million units on Feb. 14
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February contract, prices are increasing 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. The market has a higher probability of a price rise at some point forward.
Japan Futures (TOCOM)
The TOCOM active June 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 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.
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