By A. Ananthalakshmi
SINGAPORE, March 6 (Reuters) – Buying interest for rubber picked up slightly this week, but worries persisted over demand from top consumer China, traders said.
Benchmark Tokyo rubber futures fell about 3 percent this week, though they have recovered since hitting their lowest in more-than five years in September last year.
“Tyremakers are buying everyday but there weren’t any big trades,” said a Singapore-based trader, adding that producers were reluctant to sell at lower prices.
“People are worried about the Chinese economy and that demand for rubber will slow down,” he said.
Chinese Premier Li Keqiang announced on Thursday an economic growth target of around 7 percent for this year, saying the lowest rate of growth in a quarter of a century is the “new normal” for the world’s No.2 economy.
China’s rubber imports will likely drop to 3.7 million tonnes in 2015, down nearly 10 percent from the year before, the Association of Natural Rubber Producing Countries said this week.
That would be the first drop in China’s rubber imports in at least a decade.
Another reason for caution in the market was a shortage in the supply of latex, the raw material for rubber.
The supply worries have increased recently with the onset of the wintering season.
Latex output drops during the dry wintering season, when trees shed leaves and latex can be watery. Wintering in major producers lasts from February to April.
“There is less raw material in the market because of the seasonal wintering period. The shortage could support prices,” said a trader in Indonesia.
“However, demand has not been very strong, so gains could be limited.”
Indonesian tyre-grade rubber SIR20 was quoted this week at $1.43 per kilogram for April delivery, and $1.44 for May shipment.
Singapore SICOM futures were down about 2 percent for the week, with prices last traded at about $1.42 per kg.
(Reporting by A. Ananthalakshmi)
