* Bridgestone buys SIR20 at 89.00-91.75 cents/lb
* Bargain hunters from China buy Thai, Malaysian grades
* Inventory in China at 10-year high
By Lewa Pardomuan
SINGAPORE, Jan 29 (Reuters) - Bridgestone Corp, the world’s largest tyre maker, and buyers from top rubber consumer China snapped up some cargoes this week after losses in benchmark Tokyo futures dragged down physical prices, dealers said on Wednesday.
But overall demand remained weak because of the high inventory in China, where stocks in warehouses monitored by the Shanghai Futures Exchange had risen 1.8 percent to their highest since 2004. SNR-TOTAL-DW
Bridgestone bought Indonesia’s SIR20 rubber at 91.75 U.S. cents a pound for March ($2.02 a kg) on Monday. The grade was later sold to the company at much lower prices, at 89.00 to 89.50 cents in a series of deals on Tuesday evening.
SIR20 was sold to trading houses at 90.00 to 90.50 cents a pound ($1.98 to $1.99 a kg), down from $2.15 to $2.155 last week and around $2.30 a kg in December.
“We have problems with demand here,” said a dealer in Indonesia’s main growing island of Sumatra.
“Wintering has started in the northern part of the equator and supply should be decreasing, but still there’s an oversupply which the market has trouble absorbing,” said the dealer, referring to the dry wintering season.
The most active rubber contract on the Tokyo Commodity Exchange (TOCOM), currently July, added 4.3 yen a kg at 232.4 yen because of a weaker local currency, but the price was still within sight of a seven-month low of 228.0 yen hit on Tuesday.
In addition to pressure from the high inventory in China, the Tokyo market, which sets the tone for physical prices, was also confronted with stocks at Japanese ports which hit an eight-month high of 15,474 tonnes as of Jan. 20.
Thai RSS3 was reported traded at $2.20 a kg, and another Thai grade, STR20, at $2.10 for February/March delivery.
“We even heard that RSS3 has traded below $2.20, but I can’t verify this. The thing is that when the market has collapsed, producers are reluctant to declare their traded prices,” said a dealer in Malaysia.
“But some Chinese consumers claim those levels are done. There are small pickers here and there as people buy on dips,” he said.
Malaysia’s SMR20 was sold to Chinese buyers at $2.08 a kg, down sharply from the level sold by a trading house in Singapore at $2.24 a kg last week.
Prices could fall further next week as China will be on holiday for a week from Friday for the Lunar New Year.
Political drama in top producer Thailand has yet to affect trading but the embattled government is pushing ahead with a general election on Sunday despite warnings it could end in violence. (Editing by Subhranshu Sahu)