China held discussions with suppliers about buying 200,000 metric tons of rubber for government stockpiles, two industry executives with direct knowledge of the matter said today.
The State Reserve Bureau met Sinochem International Corp., China Hainan Rubber Industry Group Co. and Yunnan State Farms Group Co., the nation’s biggest domestic suppliers, about buying 150,000 tons of rubber, said the executives, who asked not to be identified as the talks are private. The bureau is also in discussions to buy 50,000 tons of smoked rubber sheet imports, they said.
Rubber futures traded in Shanghai rose 1.4 percent, the biggest gain in two weeks, to close at 20,390 yuan ($3,331) a ton. In Tokyo, contracts for the commodity rebounded from a two- week low to close at 273.40 yen a kilogram ($2,756 a ton).
The volume of the government purchase, if materialized, does exceed the previous market expectation, said Yan Xinbing, head of research at Orient Futures Co. in Beijing.
China will pay a premium of 300 yuan per ton over the prevailing rubber futures prices in the month of delivery, the executives said. Two calls to the State Reserve Bureau today seeking comment went unanswered.
Source: Bloomberg
