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 city.
"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)