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Monday, 1 November 2010 19:59 - - {{hitsCtrl.values.hits}}
* SIR20, SMR20 traded at $3.89 to $3.975/kg
* China chases nearby rubber, TOCOM at 3-week low
SINGAPORE (Reuters) - Indonesian and Malaysian tyre grade changed hands at above $3 a kg as top consumer China chased nearby shipment, but high prices in Thailand blamed on tight supply turned consumers away, dealers said on Monday.
SIR20 was traded late on Friday at 176.50 to 177.50 U.S. cents per pound ($3.89 to $3.91 a kg), while SMR20 changed hands at $3.975 a kg.
There were no details on quantity, but the tyre grade was sold to dealers in Singapore, who normally trade with China.
SMR20 was traded at a record high of $4.01 a kg last week before declines in Tokyo and Shanghai rubber futures cut physical prices in Southeast Asia.
“China is still in the market, although I think it’s not as aggressive as it used to be,” said a dealer in Indonesia’s main growing island of Sumatra. “But supply is tight everywhere and people are scrambling to get raw material.”
As heavy rains curbed the flow of latex in Sumatra, sellers still offered SIR20 at above 180 U.S. cents on Monday even though Tokyo rubber futures <JRUc6> dropped to a three-week low to track falling equities.
“Some people offer SIR20 at 180.25 to 180.50 this afternoon, but one producer thinks the value is only 178 cents,” said a dealer in Jakarta. “They are unable to sell at those levels.”
Dealers said China was ready to buy on dips to replenish inventories, but it might find prices of RSS3 grade from top producer Thailand too expensive at $4.03 a kg.
China mainly buys rubber from Thailand, Indonesia and Malaysia.
Imports rose to 1.337 million tonnes of natural rubber in the January to September period, an increase of 2.37 percent, with the September volume up by over a fifth from the previous year. [SOF/CN]
“Producers can’t bring down prices of raw material because of the rains. The cost is still above 400 cents but definitely, you can’t sell rubber at this level,” said a dealer in Thailand’s southern city of Hat Yai.
“Bridgestone placed bids at $3.96 to $3.97 on Friday but it was below the level that producers were willing sell. Nothing was sold,” said dealer, referring to Japan’s largest tyre maker.
Looking ahead, dealers expected tight supply in Southeast Asia to help cushion falls in rubber futures, and China’s buying interest, especially for SIR20 and SMR20 grades, to remain steady.
“China is still buying rubber, especially for nearby shipment,” said a dealer in Singapore, who sold SMR20 at prices close to $4 on Friday.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose to 43,511 tonnes, the exchange said on Friday, up 4.4 percent from a week earlier.
