This entry was posted on Wednesday, January 20th, 2010 at 7:45 pm and is filed under Rubber News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
SINGAPORE/BANGKOK, Jan 20 (Reuters) – Thai benchmark RSS3 rubber rose to $3.25 a kg on Wednesday, revisiting a 56-year peak scaled in mid-2008 on gains in Tokyo futures and prospects of demand from tyre makers and Chinese buyers, dealers said.
Speculative buying driven by strong oil and steady physical demand have sent the most active rubber contract on the Tokyo Commodity Exchange, currently June 2010 , to a 16-month high, lifting cash prices in Southeast Asia. [RUB/T]
Goodyear Tire & Rubber and Bridgestone Corp <5108.T> were buying rubber at above $3 a kg, while Singapore dealers, who normally sell the commodity to top consumer China, were also active in the physical market, they said.
“Most traders here in Hat Yai offer RSS3 at around $3.20 to $3.25 per kg today. That’s a reasonable price and demand remains strong,” said a dealer in Thailand’s rubber centre.
At more than $3 a kg, rubber prices in Southeast Asia are up six-fold from the start of this decade and at their highest level since 1952, when the Korean War sparked a commodity boom.
“It’s a hot market and it will keep going up,” said a physical dealer in Singapore.
RSS3 had been traded late on Tuesday as high as $3.22 a kg for nearby shipment, while some quantities of Indonesia’s SIR20 grade changed hands at $3.14 a kg. STR20 was also sold to Chinese buyers at $3.15 a kg.
“Yes, prices are quite high, however, buyers keep buying,” said another Singapore dealer.
“RSS3 was traded at $3.20 to $3.22. Buyers, including Bridgestone, Goodyear as well as Chinese tyre makers, have been buying rubber at those prices,” he added.
China’s auto market has overtaken the United States as the world’s largest thanks to a raft of policy incentives, and the Asian country has been a major bright spot amid a global industry downturn.
In 2009, a total of 10.3 million passenger cars were sold in the country, up 52.9 percent from a year earlier, data provided by the China Association of Automobile Manufacturers showed.
A rise in the cash market sparked worries that prices could drop whenever there was a correction in Tokyo futures but senior government officials from main producers Thailand, Indonesia and Malaysia said they were happy with the current prices.
The three countries, which account for 70 percent of global output, are weighing plans for a fund to regulate supply flows of the commodity to markets, but stopped short of action to rein in rising prices, a Malaysian minister said on Tuesday. [ID:nSGE60105W]
Source: Reuters