* Trading house, tyre makers chase some cargoes
* China still absent, stocks in Qingdao slip 3.4 pct
By Lewa Pardomuan
SINGAPORE, July 17 (Reuters) – China has started to make inquiries after rubber prices sank to multi-year lows, but the country’s tyre makers are likely to turn to cheaper stocks in the bonded warehouses due to uncertainties over the economy, dealers said on Wednesday.
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Rubber stocks at Qingdao, which make up the bulk of China’s inventories, stand at 330,300 tonnes, down from 341,900 tonnes in early July but still above the usual level of 250,000 tonnes.
A drop in inventory usually raises the prospects of stock replacement, but preliminary June customs data showed China’s natural rubber imports fell to 130,000 tonnes from 180,000 tonnes in May as tyre makers curbed overseas purchases.
Dealers noted purchases by Bridgestone Corp, the world’s largest tyre maker, and U.S. tyre maker Goodyear Tire & Rubber Co, but there were no reports of deals with Chinese consumers.
“There’s a bit of bargain hunting by Goodyear. Brigestone is a bit low on SIR20, but I think they are looking for Thai grades,” said a dealer in Kuala Lumpur. “Some Chinese dealers have started to check prices in the last two days.”
Indonesia’s SIR20 for September delivery was traded on Wednesday at 99.75 U.S. cents a pound ($2.19 a kg) without freight, up from between 98.00 to 99.50 cents last week. Deals at $2.185 a kg were also reported overnight for SIR20.
Tyre grades are at their weakest level since 2009 on concerns about global economic growth and uncertainty over demand from China.
China’s annual GDP growth slowed to 7.5 percent in April to June – the ninth quarter in the last 10 that expansion has weakened – putting pressure on Beijing to quicken reforms rather than slow them to take up the economic slack.
The International Rubber Study Group trimmed its global demand growth outlook to 3.8 percent for this year, down from its previous projection for a 4 percent rise, due to lingering worries about consumption in recession-struck Europe.
Among other grades, Thai RSS3 was traded late on Tuesday at $2.57 to $2.59 a kg, little changed from $2.58 last week. Another Thai grade, STR20, was untraded and offered at $2.30 a kg.
Malaysia’s SMR20 was sold at $2.24 a kg FOB, down from $2.27 a kg last week. In the bonded warehouses in Qingdao, the grade was offered at $2.23 a kg including freight this week.
WEEK AHEAD
Bargain hunters may snap up rubber next week, but China’s absence is likely to cap gains in prices.
Source: Reuters
