SINGAPORE Feb 17 The closely watched rubber
inventory in China's bonded warehouses in Qingdao jumped more
than 11 percent in the past month to around 340,000 tonnes,
three industry sources said on Monday, potentially capping gains
on Tokyo futures.
Rubber stocks in Qingdao, which make up the bulk of China's
inventory, stood at 339,900 tonnes on Feb. 15, from 304,300
tonnes on Jan. 15 and about 290,000 tonnes in December, as a
plunge in tyre grade prices spurred buying.
The increase in inventory in the world's largest rubber
consumer also suggests speculators are still using the commodity
as collateral for financing, where importers raise funds for
more lucrative investments elsewhere.
Stocks in Qingdao are not disclosed publicly, but dealers
and analysts collect data on quantities from offices in the
"The inventory is still very high, which will make the
market more prone to downward pressure," said an analyst in
Tokyo, referring to rubber futures on the Tokyo Commodity
Exchange, which have bounced in recent days from 17-month lows.
"We can also see that Shanghai rubber futures have gone up
to 16,000 yuan a tonne, but that's I think is due to the high
price of gold and other commodities," the analyst said.
The most active July contract on TOCOM hit a high of
233.8 yen a kg, its strongest since Jan.30, buoyed partly as
dealers reacted to a slight decline in rubber inventories
monitored by the Shanghai Futures Exchange.
Shanghai rubber futures jumped more 5 percent to a
high of 16,395 yuan a tonne, its highest since Jan. 27, after
earlier hitting a low of 15,695 yuan.
Dealers said rallies in both markets could be shortlived
because stocks were also high in Japan. Crude rubber inventories
at Japanese ports rose 4.1 percent from 10 days earlier to
18,094 tonnes as of Feb. 10, data from the Rubber Trade
Association of Japan showed on Monday.
Tyre grades in Thailand, Indonesia and Malaysia have sunk to
multi-year lows on concerns over weakening demand from China.
The International Rubber Consortium (IRCo), which represents
the three countries has recommended that its members should not
sell natural rubber at current low prices.
(Reporting by Lewa Pardomuan; Editing by Richard Pullin)