Rubber prices
\nrise on Medan
\nriot concerns<\/p>\n
SINGAPORE (AFP): Natural rubber prices are expected to remain
\nfirm for the next few weeks as labor riots in Indonesia compound
\nan already tight supply situation and rising demand, dealers said
\nyesterday.<\/p>\n
Prices of Technically Specified Rubber (TSR) 20 rose two-to-
\n2.5 Singapore cents a kilogram (2.2 pounds) here yesterday as
\ntraders bought futures contracts to hedge against a disruption in
\nsupply from Medan, dealers said.<\/p>\n
Prices for May Ribbed Smoked Sheet 1 futures closed at 148.00
\nSingapore cents (95 U.S. cents) a kilogram, RSS 3 at 94 U.S.
\ncents and TSR 20 at 170 Singapore cents on the Singapore
\nCommodity Exchange yesterday.<\/p>\n
The price of TSR 20 yesterday represented a 4.5 cent rise from
\nFriday before the trouble started, while RSS 1 was up 1.75 U.S.
\ncents and RSS 3 gained 2.25 cents.<\/p>\n
Medan is one of the largest ports for shipment of Standard
\nIndonesian Rubber (SIR) 20, which is produced to customers'
\nspecification and shipped primarily to the United States.<\/p>\n
Dealers said that although most factories around Medan have
\nreopened since last week's riots by workers demanding higher
\nwages, some were operating with half their workforce.<\/p>\n
Only two or three factories remained closed as owners
\ncontinued wage negotiations with workers' unions, dealers said.<\/p>\n
Delay<\/p>\n
A Japanese buyer, who is experiencing a delay in shipment of
\n80 tons of the raw material, said that the problem was not
\nserious as most people made it out to be because Medan port was
\nstill open.<\/p>\n
"Only four of our containers have been deferred to the next
\nvessel, which will sail in a week's time," he said.<\/p>\n
A major buyer of SIR 20 said his shipments had been on target
\nso far but added that if things worsen he would have to look to
\nother countries, such as Thailand, Malaysia, India and the
\nPhilippines, for supplies.<\/p>\n
Dealers said the supply situation in Thailand, the world's
\nlargest producer, was also tight because the "wintering season"
\nwas expected to continue into May. Good demand from Chinese
\nbuyers also affected supply.<\/p>\n
Wintering is a period beginning around February when rubber
\ntrees shed their leaves and produce less latex.<\/p>\n
"I think the run-up will continue for another four to five
\nweeks. Prices can move up another two-to-two-and-a-half cents
\nfrom here," said one of Singapore's leading brokers.<\/p>\n
Dealers said prices were experiencing a correction just before
\nthe Medan riots, following a strong rally which began at the end
\nof last year and lasted until last month.<\/p>\n
The rubber market had been underpinned by a stronger-than-
\nexpected recovery in the U.S. economy and tight supply in
\nThailand and Indonesia, the two largest producers, dealers said.<\/p>\n
Recent Chinese purchases also aided market sentiment, they
\nsaid.<\/p>\n
China was rumored to have bought 30,000 tons of RSS 3
\nyesterday, but some dealers said the actual amount was likely to
\nbe smaller.<\/p>\n
"The undertone of the market was steady even before the Medan
\nriots," a European dealer said, adding he expected Ribbed Smoked
\nSheet (RSS) 3 prices to rise at a faster rate because it was
\nbeing traded at a discount to TSR 20.<\/p>\n
A European buyer said prices should stabilize if riots in
\nMedan did not flare up again.<\/p>\n
"Prices should hover around this level if the situation calms
\ndown," he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rubber-prices-1447899208",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}