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4 years ago
Asia Rubber-China, tyre makers buy as calls to limit sales fall on deaf ears
February 12, 2014 / 7:01 AM / 4 years ago

Asia Rubber-China, tyre makers buy as calls to limit sales fall on deaf ears

* SIR20 sold to Bridgestone, prices off lows

* Thai, Malaysian grades also sold; TOCOM lifts prices

* Producing countries recommended to limit sales

By Lewa Pardomuan

SINGAPORE, Feb 12 (Reuters) - Main rubber consumer China and tyre makers purchased several cargoes for nearby shipment this week after prices sank to multi-year lows, with producer nation calls for dealers to limit sales falling on deaf ears, traders said on Wednesday.

Tyre grades from Thailand, Indonesia and Malaysia changed hands in a series of overnight deals at $1.92 to $2.15 a kg, higher than $1.87 to $2.00 a kg last week. Top tyre maker Bridgestone Corp was among buyers looking for bargains.

The International Rubber Consortium (IRCo), which represents Thailand, Indonesia and Malaysia, on Monday recommended that its members should not sell natural rubber at current low prices.

The Indonesian Rubber Association (GAPKINDO) followed suit, encouraging members to not to rush into selling. Indonesia's SIR20 was traded at its lowest in five years last week on weakness in Tokyo futures and concerns over economic growth in China.

"I think it's very naive. It's impractical to ask people to limit sales," said a senior dealer in Singapore. "It's not advisable."

Thailand, Indonesia and Malaysia last acted jointly in 2012-2013, agreeing to cut exports by 300,000 tonnes, or 3 percent of 2012 global output. The move only briefly supported prices and the agreement was later discontinued.

"I think it will be difficult to regulate sales. When you've got plenty of rubber from suppliers, then of course, you'd want to sell as much rubber as you could," said a dealer on Indonesia's main growing island of Sumatra.

March/April SIR20 was traded to Bridgestone and dealers in Singapore at 87.00 to 87.75 U.S. cents a pound ($1.91 to $1.93 a kg), higher than 85.00 to 85.50 U.S. cents last week because of gains in rubber contracts on the Tokyo Commodity Exchange.

The most active July rubber contract on TOCOM has rebounded from 18-month lows struck last week on rallies in Japanese equities, but gains are likely to be capped by high inventory in China.

Chinese rubber imports climbed nearly a quarter in January from the year before, customs data showed, even as inventories continued to swell, suggesting that speculators are still using the commodity as collateral for financing.

Thai RSS3 changed hands at $2.13 to $2.15 a kg, steady from last week's offer price of $2.15. Another Thai grade, STR20, was traded to China at $2 a kg, traders said.

Malaysia's SMR20 was sold to Singapore dealers at $2.01 to $2.025 a kg, higher than $1.97 to $2.00 last week.

WEEKAHEAD

Tyre grades could up next week if Tokyo rubber futures extend gains and supply tightens during the current dry wintering season in the three main producing countries.

Editing by Joseph Radford

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