* Bridgestone buys SIR20 at 76.75 cents/lb for Aug/Sept
* SMR20 traded for July, Thai sellers reluctant
* Tokyo futures head for second monthly decline
By Lewa Pardomuan
SINGAPORE, May 30 Bridgestone Corp, the
world's largest tyre maker, bought Indonesian rubber this week
and few cargoes of Malaysian grade were sold among trading
houses, but Thai sellers waited for prices to improve, dealers
said on Friday.
The TSR20 contract on Singapore's SICOM exchange,
which covers Thai, Indonesian and Malaysian grades, is still
near a five-year low amid worries of an economic slowdown in
China, the world's top rubber consumer.
Oversupply also dragged on prices, with benchmark Tokyo
rubber futures, which set the tone for physical rates,
on course for a second straight monthly decline.
Global supply is forecast to exceed demand by 241,000 tonnes
in 2014 for, a fourth straight year of glut, according to the
International Rubber Study Group, which rules out any near-term
rebound in prices.
Indonesia's SIR20 was sold to Bridgestone at 76.75 U.S.
cents a pound ($1.69 a kg) for August/September delivery,
dealers close to the transaction said. There was no inquiry for
prompt shipment, which suggested that buyers were either
well-stocked or waiting for cheaper prices.
"Prices are so low, so there are no incentives for tappers.
Rubber processors in Indonesia have no margins at all and they
are trying to cut production," said a dealer in Singapore, who
trades Indonesia and Malaysian grades. "For those who have
committed contracts, of course they have to process rubber and
deliver goods in time. It's a very lousy market."
Malaysia's SMR20 was traded at between $1.70 and $1.78 a kg
for July delivery. Thai STR20 was offered at $1.80 a kg while
another grade, RSS3, was quoted at $2.06 to as high as $2.15 a
kg with no reports of deals.
China was absent from the physical market due to high
inventory in bonded warehouses in Qingdao, estimated by dealers
at around 362,000 tonnes, up from 290,000 tonnes in January.
Stocks in Shanghai stood at 159,270 tonnes.
In addition to the high stocks in China, the physical market
was also under pressure from Thailand's plan to sell 200,000
tonnes of state rubber stocks, although a political crisis in
the world's top producer was likely to delay the sale.
"Thai sellers are trying to maintain the prices. We haven't
heard of much trade recently. They are still into June and July
delivery because rubber is available at the moment," said a
dealer in Kuala Lumpur.
Tyre grade prices could fall next week unless consumers
decide to stock up to take advantage of the low prices.
A slump in natural rubber prices to multi-year lows is
spurring Southeast Asian farmers to turn to other crops and
tappers to look for other jobs, potentially chipping away at a
chronic supply overhang.
(Editing by Himani Sarkar)