(Repeats earlier story with no change in text)
* Rubber stocks at Qingdao port fall more than 9 pct from
* Drop partly linked to financing drying up after port fraud
* Benchmark Tokyo futures down more than a fifth this year
By Lewa Pardomuan
SINGAPORE, June 24 Rubber stocks in bonded
warehouses in China's Qingdao port have fallen about a tenth
from a peak in May, partly on reduced demand for the commodity
as a loan collateral after a fraud investigation at the port,
industry sources said.
The drying up of rubber financing deals shows how a probe at
Qingdao port, the world's seventh busiest, into suspected fraud
related to metal financing has had an impact on other
commodities used in a similar fashion.
Metals such as copper and zinc have been widely used for
financing, a practice in which a commodity is pledged as
collateral for a bank loan. But other commodities such as iron
ore, soybeans and rubber have also been pulled into the trade,
driving up stockpiles.
"After the investigation into metals, banks are more careful
in granting financial support, so it's not like before," said a
senior person involved in the rubber industry in Singapore.
The source, who declined to be named, said banks were being
more selective and possibly more conservative.
The market closely monitors rubber stocks in Qingdao, which
account for the bulk of inventory in China, the world's biggest
consumer, but are not disclosed publicly.
Three dealers and analysts, who collect data from offices in
Qingdao, estimated stocks of natural, synthetic and compound
rubber slipped to 327,900 tonnes this week, from 362,200 tonnes
in mid-May and around 341,000 tonnes in late June last year.
About 14 percent of the stock holding is compound rubber
which dealers say is mostly tied to financing deals. Compound
rubber is made of natural and synthetic rubber and used in
A drop in Qingdao stocks is usually positive for rubber
prices as it implies stronger demand in a global market which is
in its fourth year of oversupply.
But a sustained move away from the use of rubber for
financing could also lead to a bigger liquidation of stocks in
the market and another price slump.
Benchmark Japanese rubber futures have lost about a
fifth of their value this year, though they have rebounded from
a near five-year low of around 190 yen per kg. Further gains
could hinge on stock levels in Qingdao, dealers said.
Global banks including Standard Bank Group and a
part-owned unit of Louis Dreyfus Corp,
Singapore-listed GKE Corp have warned of potential
losses from the Qingdao scandal. Other banks are reviewing
metals financing to some clients in China, while HSBC Holdings
said it was assessing transactions on a case-by-case
As financing dries up, holders may move their rubber cargoes
to reputable warehouses, possibly outside China, to avoid paying
taxes. But dealers also saw some real demand for compound rubber
used in tyres, which accounts for about 60 percent of global
The inventory of natural rubber in Qingdao, which represents
2 percent of global output, has fallen more than 3 percent to
261,000 tonnes since May, with a total value of about $530
million at current market prices.
But stocks of compound rubber have dropped far more, by
about a third since last month to 45,600 tonnes, less than half
of this year's peak of 101,800 tonnes reached in January.
With domestic natural rubber trading at a discount of up to
$200 a tonne to physical prices in Southeast Asia, speculators
are reluctant to bring in more rubber into China.
"One of the reasons why stocks have fallen is because there
has been less rubber for financing," said a China-based dealer
who trades tyre-grade rubber from Southeast Asia. "I expect
stocks to keep falling."
(Additional reporting by Rujun Shen in SINGAPORE and Osamu
Tsukimori in Tokyo; Editing by Manolo Serapio Jr. and Ed Davies)