China, the world’s largest rubber user, may increase government stockpiles this week to support farmers and mop up oversupply after local prices slumped, Orient Futures Co. said.
Officials from the State Reserve Bureau will meet in Beijing tomorrow with executives from Sinochem International Corp., China Hainan Rubber Industry Group Co. and Yunnan State Farms Group Co., the three biggest domestic suppliers, said Yan Xinbing, and analyst at Orient Futures, citing talks with the companies. The bureau bought about 100,000 metric tons in the past month from the suppliers, Yang said.
“It’s likely to buy more locally produced latex rubber in a move to support farmers and producers,” Yan said by phone from Beijing today.
The bureau, which is responsible for stockpiling strategic raw materials such as natural rubber, copper, aluminum and zinc, hasn’t commented publicly on the matter. Two calls and a fax to the press office of the National Development of Reform Commission, which oversees the bureau, weren’t immediately answered. Calls to the three suppliers went unanswered.
Rubber traded in Shanghai fell 26 percent this year and closed at 19,615 yuan ($3,220) a ton today. Futures on the Tokyo Commodity Exchange have slumped 9.3 percent in 2013 and settled at at 274.5 yen a kilogram ($2,673 a ton).
Inventories tracked by the Shanghai Futures Exchange rose to the 172,022 tons on Nov. 21, the highest level in nine years, before retreating to 150,978 tons last week, data from nine warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, showed.
Source: Bloomberg
