* SIR20 done at $3.04-$3.06/kg for March
* SMR20 sold at $3.14, STR20 reported done at same level
* China seen buying rubber from local inventory
By Lewa Pardomuan
SINGAPORE, Jan 16 (Reuters) – China is likely to turn to its own rubber inventory which is being offered at discounted prices, dashing hopes the world’s largest consumer will return to the physical market ahead of the Lunar New Year early next month, dealers said on Wednesday.
Although Thai, Indonesian and Malaysian tyre grades changed hands in a series of overnight deals, they were sold among trading houses only. Other tyre makers may look for bargains after price-setting Tokyo futures slipped from 9-month highs.
“As far as I know, China hasn’t come in to buy. They normally want prompt shipment, which means they don’t want the cargo to arrive when they are away on holiday. Shipments to China take from 12 to 15 days,” said a dealer in Kuala Lumpur.
“I don’t think they are buying now. If they need rubber urgently, they can buy it from warehouses. Ex-warehouse rubber in China can be as much $50 a tonne cheaper if you include freight.”
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.8 percent to 101,482 tonnes last week, their highest in more than two years following recent strong imports. SNR-TOTAL-DW
China takes 35 percent of rubber, making it the world’s largest user of the commodity.
Indonesia’s SIR20 rubber was sold to dealers in Singapore late on Tuesday at 138 and 139.00 U.S. cents a pound ($3.04 and $3.06 a kg) for March shipment, little changed from last week.
Malaysia’s SMR20 was traded at $3.14 a kg, having been offered at $3.30 last week.
There was talk that Thai STR20 was sold at $3.12 to $3.14 a kg, down from an offer price of $3.20 last week after Tokyo rubber futures fell from a peak.
Tokyo futures fell by 3 percent as a shaky global economic outlook and a pause in the yen’s recent selloff prompted profit-taking after prices hit a nine-month high last week. The June contract fell as low as 302.8 yen, down 9.3 yen, or 3 percent.
“We haven’t detected any demand from China. Considering market sentiment, I don’t think Chinese buyers are likely to buy rubber from us at the current price level,” said a dealer in southern Thailand.
Another Thai grade, RSS3, was offered on Wednesday at $3.20 a kg, down sharply from the traded price of $3.33 last week.
WEEK AHEAD
More gains in the yen could weigh on Tokyo futures and cut physical prices, possibly inducing demand from tyre makers such as Brigestone Corp.
The yen extended gains for the second day on Wednesday after Japan’s Economics Minister Akira Amari cautioned that excessive yen weakness could boost import prices.
(Editing by Joseph Radford)
Source: Reuters
