* RSS3 done at $2.95-$2.96/kg, STR20 untraded
* Singapore dealers buy SIR20 at 124.75 cts/lb
* China quiet, inventory at 3-year high
By Lewa Pardomuan
SINGAPORE, March 27 (Reuters) – Tyre grade prices rose as much as two percent over the past week after Tokyo futures rebounded from their weakest level in three months, but main consumer China remained elusive because of its high domestic inventory, dealers said on Wednesday.
Although dealers noted buying interest from second-largest consumer India, China’s absence was likely to weigh on the physical market after the country’s rubber stocks jumped to their highest since 2010, at 115,991 tonnes. (SNR-TOTAL-DW)
April/May Thai RSS3, the benchmark grade in Southeast Asia, was sold to unspecified buyers at $2.95 to $2.96 a kg in a series of overnight deals, higher than 2.89 to $2.90 last week. Another Thai grade, STR20, failed to attract buyers.
“China hasn’t been active for quite some time, but people are saying that there’s a little buying interest from India,” said a dealer in Thailand. “Wintering is happening here but there’s nothing unusual.”
STR20 was offered at $2.87 to $2.90 a kg, but bids only emerged at $2.82 to $2.83.
The dry wintering season in Thailand, Indonesia or Malaysia curbs the flow of latex and often supports the physical prices and rubber contracts on the Tokyo Commodity Exchange. But TOCOM is also influenced by other markets, such as stocks and oil.
The most active September contract rose 1.6 percent to reach a high at 284 yen a kg after data pointing to an improving U.S. economy hit the yen, but gains were limited as trading houses fixed positions ahead of the end of the business year in Japan.
“I think TOCOM will trade in a narrow range. There will be position squaring because this is the end of the quarter,” said a dealer in Tokyo. “Maybe we will see the support level at 275 yen and resistance at 285 yen. I don’t see fresh fundamental factors.”
Last week, the contract plunged to 269.5 yen, its lowest since last December, after stock markets dropped on concerns over the debt crisis in Cyprus.
Indonesia’s SIR20 rubber was sold to Singapore dealers at 124.75 U.S. cents a pound, higher than 123.25 to 123.50 cents last week, with dealers also noting buying interest from Bridgestone Corp, the world’s largest tyre maker.
Malaysia’s SMR20 changed hands at $2.855 a kg versus $2.82 to $2.83 last week.
“Of course it’s a bit difficult to get interest from China because the stocks are still to high. They can easily buy locally for prompt delivery at cheaper prices. We are talking about $2,800 a tonne,” said a dealer in Singapore.
“India is there, but we sell very little rubber to this market because it’s a discount market. We have to sell rubber cheaply. We are not so keen.”
India, also the world’s fourth largest rubber producer, may raise import duties on natural rubber by 70 percent after domestic prices dropped nearly 20 percent in the last five months on sluggish demand and a surge in cheap imports.
WEEK AHEAD
Tyre grades are likely to track movements on Tokyo futures next week, which means prices could drop below the current level if TOCOM resumes the downtrend. (Editing by Clarence Fernandez)
Source: Reuters
