China stockpiled 60,500 tonnes of domestic rubber this week to support farmers, but the quantity bought by the world’s top consumer was below expectations, industry sources said. The physical market had been abuzz with talks that China could be buying more rubber from the international market after it bought a Thai grade in October for its national reserves. But hopes for more purchases fizzled out on worries over slowing economic growth and soaring company and trader inventories.
The latest purchase, however, suggests China could be shifting to locally produced rubber, traders said.
Government reserves purchased 45,000 tonnes of rubber from China Hainan Rubber Industry Group, 10,500 tonnes from Yunnan State Farms and 5,000 tonnes from Sinochem International, according to an industry website backed by the Qingdao Rubber Exchange.
Prices ranged from 19,200 yuan to 20,300 yuan per tonne ($3,200-$3,300), according to the report on the website. “It was very disappointing,” said Song Chao, an analyst at Tianma Futures, adding that the market was expecting purchases of 180,000 tonnes.
Three physical dealers in Singapore also said that China had just purchased about 60,000 tonnes of domestic rubber.
In late October, China bought 54,000 tonnes of Thai RSS rubber at 20,400 yuan to 21,500 yuan a tonne that had been imported by Hainan Rubber Industry Group, Sinochem International Corporation, Founder Commodities and Anhui Technology Import and Export Co Ltd.
China’s rubber output is estimated at 868,000 tonnes this year, up 9.2 percent, according to the Association of Natural Rubber Producing Countries.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 7.2 percent from last Friday to 161,896 tonnes, within sight of nine-year high of around 172,000 tonnes hit in November.
Source: Business Recorder
