Bears keep stranglehold on Southeast Asian trade<\/p>\n
SINGAPORE (Reuters): The Southeast Asian rubber trade remained
\nmired in a ferocious bear market as poor consumer sentiment is
\nseen driving prices lower this week, dealers said yesterday.<\/p>\n
\"It's extremely bearish,\" a senior European dealer said.
\n\"There's too much supply and stocks are everywhere. If you are a
\nproducer, these are not happy times.\"<\/p>\n
Dealers in Thailand, the world's biggest producer of natural
\nrubber, said the only buyers in the market were the Japanese.<\/p>\n
Tire manufacturer Michelin was the only other buyer, picking
\nup some rubber in small-lot routine buying, they said.<\/p>\n
\"There's hardly any buying interest. Some are calling up just
\nto check on prices,\" said one Malaysian trader.<\/p>\n
There was no sign of consumers returning to the market,
\nalthough European buying was traditional before the year-end
\nholidays, the trader said.<\/p>\n
\"Offtake from Europe and the United States is very poor. They
\nhave bought whatever they needed. China is also quiet and they're
\nnot in the market at all,\" a Japanese dealer in Singapore said.<\/p>\n
\"I think prices are going to fall again this week because of
\nthe slow demand,\" a trader in Indonesia added.<\/p>\n
Another trader in Indonesia said: \"I am pretty sure the trend
\nwill remain bearish throughout the rest of this year.\"<\/p>\n
Malaysian dealers said that in the absence of new factors, the
\nlocal market took its cue from the weakness seen in Tokyo. The
\nlack of clear direction of the Malaysian ringgit against the U.S.
\ndollar also limited activity, they said.<\/p>\n
One dealer said he expected prices to fall another four to
\nfive Malaysian cents a kg this week.<\/p>\n
\"There (are) signs that supply is also picking up and this
\nwill add (to) pressure on prices,\" the trader said. \"Weather
\nconditions are ideal for rubber production,\" a dealer in
\nSingapore said, adding ample supplies will continue to reach the
\nmarket and put regional prices on the defensive.<\/p>\n
The trade is also keeping an eye on whether Bangkok's new
\ngovernment will eliminate its rubber intervention scheme or sell
\npart of its 110,000-ton buffer stock, which will further savage
\nan already depressed market.<\/p>\n
Thai dealers said there was no sign of the government in the
\nmarket last week, which partly accounted for easier prices.<\/p>\n
\"We don't know whether their absence was a short-term hiccup
\ndue to a change in the government or whether the government has
\nno money to do it anymore,\" a dealer in the Thai rubber center of
\nHat Yai said.<\/p>\n
Bangkok has cut spending for fiscal 1997\/98 (Oct\/Sept) to meet
\nIMF austerity targets.
\nThe price of Thailand's benchmark RSS3 for March shipment was
\nquoted around 75.00 U.S. cents per kg FOB Bangkok.<\/p>\n
In Indonesia, traders said offer prices were quoted at 39.50
\ncents FOB Palembang for February shipment. Offer prices for
\nJanuary shipment in Medan were quoted at 40.00 cents and at 38.75
\ncents FOB Surabaya for December shipment.<\/p>\n
The Malaysian Rubber Exchange and Licensing Board quoted the
\nkey RSS1 at 277 Malaysian cents a kg for May buyer at the close
\nof trade on Friday, down 10 cents from the previous week.<\/p>\n
SMR 20 buyer was quoted at 277.50 cents a kg, against 285 the
\nprevious week.<\/p>",
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"sponsor": "Okusi Associates",
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