SINGAPORE, Aug 19 (Reuters) – The rubber inventory in China’s bonded warehouses in Qingdao slipped nearly 5 percent to just below 300,000 tonnes in the last two weeks as local tyre makers turned to cheaper supply, dealers said on Monday.
Rubber stocks at Qingdao, which are closely watched and make up the bulk of China’s inventory, stood at 298,300 tonnes, the dealers said. That’s down from 313,100 at the end of July, but still above the usual level of 250,000 tonnes, they said.
A drop in Qingdao is usually seen as a bullish signal for the market as it raises the prospects of more imports. But it could also indicate local tyre makers are still reluctant to buy from overseas markets despite signs the economy is improving.
“I think the inventory is still on the high side. It’s hard to say whether or not this is going to be bullish for the market. Maybe in the mid and long term,” said a dealer in Tokyo.
“I guess TOCOM rubber will trade in a range until the end of this year,” said the dealer, referring to benchmark rubber futures on the Tokyo Commodity Exchange.
The most active rubber contract on TOCOM, currently January, was little changed at 266.5 yen a kilogramme. Prices have rebounded from a 9-month low on bargain-hunting and easing concerns about the Chinese economy.
Inventories in Qingdao’s bonded warehouses are not disclosed publicly, but dealers and analysts collect data on quantities from offices in the city, where tyre grades are a few U.S. cents cheaper than those offered in Southeast Asia.
(Reporting by Lewa Pardomuan; Editing by Tom Hogue)
Source: Reuters
