SINGAPORE, July 20 (Reuters) – Japan’s largest tyre maker, Bridgestone Corp <5108.T>, bought some Thai tyre grade rubber at a bargain, while main consumer China may step up purchases before futures prices rise further.
Other tyre manufacturers chased Indonesian rubber for nearby shipments and dealers expect buyers from China to re-enter the market soon on worries that firming oil prices could drag prices on Tokyo or Shanghai futures even higher.
Thai RSS3 was sold to Bridgestone at $1.745 a kg late on Friday for September shipment, below Monday’s level of $1.80 because sellers jacked up prices after the most active contract on Shanghai futures rallied to its strongest since October.
“China is still looking for nearby shipments but they claim the price is too high. But the price keeps coming up while they are on the sidelines, so they will have to decide and buy soon,” said a dealer in Thailand’s southern city of Hat Yai.
“If they need the cargo, they have to pay up,” he added.
Tokyo rubber futures were closed for a public holiday. Most active Tokyo rubber futures, currently Decemmber rose two percent to a one-month high above 170 yen on Friday on improved technical charts and firm oil. [RUB/AS]
Dealers noted deals between sellers in Indonesia and unspecified tyre makers at around 72.00 U.S. cents per pound ($1.59 a kg).
SIR20 also changed hands at 73.00 cents free-on-board Belawan in North Sumatra for September delivery and at 73.50 cents FOB Surabaya in East Java for October and December shipments. Malaysia’s SMR20 was offered at $1.70 a kg but there were no buyers.
“Major tyre makers concentrate on August and September and pay 72.50 cents, which, at present, undercuts even African-origin offerings,” said a physical dealer in Jakarta, who sells SIR20 grade.
“Interest is brisk, and while some analysts look for a correction, just as many pencil in further rises in the coming weeks as the Chinese economy supports the rest.”
China has bucked the trend in the struggling global car industry. The China Association of Automobile Manufacturers said passenger car sales jumped 47.7 percent in June to 872,900, partly due to the government’s stimulus measures. [ID:nSHA165501]
On the supply front, unseasonal rains subsided at the weekend in main rubber producer Thailand, raising hopes that more rubber will enter the market in the next few days.
Supplies have been tight in Thailand after heavy rains hit plantations just after the end of the February to April wintering season, during which trees shed leaves and latex output drops.
“If the weather continues to be dry this week, then we expect supply will be much better next week,” said the dealer in Hat Yai.
Oil firmed above $64 a barrel on Monday, extending last session’s 2.5 percent gains due to a rally in Asian stocks and fall in the dollar on hopes of a global economic recovery.

Source: Reuters

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