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Asia Rubber-Bridgestone chases Indonesian rubber, other grades subdued

* SIR20 sold to Bridgestone at $1.66-$1.675/kg

* SMR20 reported done at $1.66 CIF China

* Thai sellers reluctant to make offers

By Lewa Pardomuan

SINGAPORE, June 6 (Reuters) – Top tyre maker BridgestoneCorp chased Indonesian rubber this week for nearbydelivery, dealers said on Friday, but falling prices kept othersellers out of the market.

Singapore’s tyre grade prices were trading near theirlowest in almost five years because of weakness in Tokyo rubberfutures, pressure from global oversupply and persistentworries about economic growth in top consumer China.

A decision by Thailand’s military government to suspend aplan to sell 200,000 tonnes of rubber from stocks has donelittle to support Tokyo’s benchmark prices, which have plungednearly 30 percent this year.

Indonesia’s SIR20 grade was sold to Bridgestone at $1.66 to$1.675 a kg for June delivery, free-on-board (FOB), in a seriesof overnight deals, down from $1.69 last week. Sellers in topproducer Thailand were reluctant to offer rubber.

Thai RSS3 was quoted at $2.02 a kg for nearby delivery, downfrom as high as $2.15 last week, with no reports of deals.Another grade, STR20, was offered at around $1.70 a kg, downfrom $1.80 last week.

“We didn’t hear much activity for both grades. There are notmany sellers around because the cost to process rubber is muchhigher than the offer prices,” said a dealer in Thailand.

“The estimated cost of production for STR20 is about $1.80.Chinese buyers are making some inquiries as usual, but the pricethey are willing to pay is extremely low,” the dealer said.

Malaysia’s SMR20 was quoted at $1.67 to $1.70 a kg, downfrom up to $1.78 last week. One Kuala Lumpur-based dealer saidthe grade sold at $1.66 a kg, including freight to China.

Rubber inventory in China has dropped in recent weeks tobelow 160,000 tonnes, but stocks in the bonded warehouses remainhigh at around 360,000 tonnes, according to dealers’ estimates.(SNR-TOTAL-DW)

The high rubber inventory in Qingdao suggests speculatorsare still using the commodity as collateral for financing.

Global trading houses and banks have been scrambling thisweek to check on their exposure to a probe on commodityfinancing by Chinese authorities, as worries grow that anycrackdown on the practice could hit trade in the world’s largestbuyer of many commodities.

WEEK AHEAD

Tyre grade prices are likely to fall again next week asconsumers wait for bargains.

(Editing by Tom Hogue)

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