SINGAPORE, June 5 (Reuters) – Deal activity picked up thisweek in the physical rubber markets as a dip in prices afterrecent sharp gains attracted back buyers, with global tyremakers snapping up Indonesian grade.
The Tokyo Commodity Exchange rubber contract haslost 0.3 percent this week after jumping 10 percent last week.
Front-month SICOM rubber has lost about 3 percent onthe week after six straight weeks of gains. It fell to aone-week low of 158.80 U.S. cents per kg on Friday, afterhitting a nine-month peak of 166 U.S. cents last week.
“Buying interest picked up this week because of lowerprices,” said a trader in Jakarta. “But producers are stillwaiting for higher levels. They are insisting on $1.64-$1.65,sometimes even higher.”
Goodyear bought the Indonesian SIR20 grade for Julyshipment at $1.62 per kg, traders said.
Sumitomo Rubber Industries bought rubber for Augustshipment at $1.62-1/2 per kg.
The RSS3 grade changed hands at $1.87 per kg for Julyshipment.
Despite the recent uptick in prices, raw material costscontinue to worry rubber producers.
Prices of the raw material in Indonesia have gone up to18,600-18,800 rupiah ($1.40- $1.42) per kg this week, from18,000 rupiah last week, traders said.
Raw material supply has dipped due to the wintering season,when latex output drops. Output has been particularly tight inMedan, the provincial capital of North Sumatra.
In Thailand, buyers were seeking the STR20 grade at $1.63per kg, although producers were still holding out for betterprices of $1.65-$1.72, traders said.
“The drop in prices attracted buyers though many are stillwaiting for a market correction,” said a Thai trader.
Thai prices have been supported recently by the presence ofChinese buyers, which alleviated some fears of slowing demandfrom the top consumer.
A monthly report from SICOM this week noted “growinginterest in deliveries from North Asia traders”.

Source: Rueters

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