China, the world’s largest rubber consumer, was making inquiries for prompt shipment while tyre maker Bridgestone (5108.T: Quote, Profile, Research) purchased some quantity of Indonesia’s SIR20 at a bargain, dealers said on Tuesday.
Other major tyre makers, Goodyear (GT.N: Quote, Profile, Research) and Michelin (MICP.PA: Quote, Profile, Research), were on the sidelines after active buying in recent weeks, but consumers may not be in a hurry to buy as natural rubber supplies begin to improve in top producer Thailand.
Thai’s RSS3 was sold at $1.63 a kg to Singapore dealers, while Japan’s largest tyre maker Bridgestone bought SIR20 at 67.50 U.S. cents per pound ($1.49 a kg) for August shipment late on Monday, 14 cents lower than the Thai grade.
“I guess Bridgestone people always place lower bids. They are also a big consumer, so they have the bargaining power,” said a dealer at an international trading house in Singapore.
“Some Chinese buyers have placed bids at $1.6450 but we are reluctant to sell because it’s just too low,” he added.
China has bucked the trend in the struggling global car industry, posting year-on-year sales growth of 47 percent in May as government stimulus measures fuelled a recovery in demand.
July RSS3 added 1 cent to $1.68 a kg on Tuesday to track gains in Tokyo futures, where the most active December contract JRUc6 hit an intraday high of 162.9 yen a kg, its strongest since June 17, on rising oil prices.
Prices of SMR20 and SIR20 also edged higher. <RUB/AS>.
Some dealers said China’s demand had slowed in the last two months after aggressive buying earlier this year, raising speculation it was turning to its own stocks to meet demand. Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 0.1 percent in the week ended June 25 to 41,393 tonnes from 41,453 tonnes the week before.
“I heard some buyers were bidding RSS3 at $1.63, and I think it’s traded. I think it’s sold to dealers in Singapore. I don’t hear Chinese buying buying in the market,” said a dealer in Thailand’s southern city of Hat Yai.
“Michelin and Goodyear are rather quiet. I guess this is OK, although it rained over the weekend. Overall, people expect supplies should be better in July,” he said.
Prices of Thai 60-percent latex in drums for July were unchanged from Monday’s levels at $1,210 a tonne, although some dealers also quoted the raw material $10 lower at $1,200.
Supplies have been tight in 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.