SE Asian rubber prices may rise with Thai buying<\/p>\n
SINGAPORE (Reuter): Southeast Asian rubber producers, hammered
\nin the past few weeks by falling prices, are optimistic sales
\nwill improve this week due to Thai government buying support for
\nthe market, regional traders said yesterday.<\/p>\n
The trade will benefit from the expected start of the Thai
\npurchasing program at the new higher intervention price of 29
\nbaht a kg, raised from 27.50 baht a kg previously, and a
\ncontinuation of modest Japanese buying, they said.<\/p>\n
\"Prices are going up because of what is happening in Thailand.
\nThis week's trend will be bullish and the chances for prices to
\nshoot up are quite big,\" said one trader in Jakarta.<\/p>\n
\"Supplies of RSS3 are getting right because of shortcovering
\nafter the government moved up the delivery date for its purchase
\nto May instead of June and July,\" a Thai dealer said.<\/p>\n
But other regional traders were skeptical the combination of
\nThai government intervention and Japanese buying would be enough
\nto pull the market out of its extended rut.<\/p>\n
\"For me, that kind of thinking is speculation. I don't see
\nanything to bring the market out yet. There are no orders coming
\nin and that's the bottom line,\" a dealer for a foreign brokerage
\nhouse in Singapore said.<\/p>\n
\"If you're talking about sales, then I think we saw more
\ncovering by local agents for earlier sales made to overseas
\nclients, not fresh demand,\" a dealer in Malaysia added.<\/p>\n
Another Malaysian analyst said she had been informed that the
\norder books of most European and U.S. buyers were full until the
\nthird quarter of 1997.<\/p>\n
\"This will indirectly make Malaysian rubber more competitive,
\nas it will become cheaper than Thai rubber,\" a dealer in Malaysia
\nsaid.<\/p>\n
A continuation of the sharp currency fluctuations in Southeast
\nAsia last week, following the failed speculative assault on the
\nThai baht, will also make it difficult for rubber producers in
\nthe regions.<\/p>\n
\"All of these currency fluctuations have made planning
\ndifficult, or confusing to say the least,\" a trader said.<\/p>\n
The Buddhist Vesak holiday, which will be celebrated on
\ndifferent days this week in Southeast Asia, may also put a damper
\non trade, dealers said.<\/p>\n
Thailand, the world's biggest producer of natural rubber, is
\ncelebrating the holiday on Tuesday. Singapore and Malaysia will
\nhold their celebrations on Wednesday and Indonesia on Thursday.<\/p>\n
The Thai benchmark RSS3 grade rubber was quoted last week at
\naround 115.00 U.S. cents a kg FOB Bangkok for July shipment and
\n117.50 cents for August shipment against 112.50 and 114.00 cents
\nrespectively the previous week.<\/p>\n
\"Japan is the only major buyer now. There were some bids from
\nthe U.S. in the regional market,\" a dealer in the Thai rubber
\ncenter of Hat Yai said, adding though that no major deals have
\nbeen concluded.<\/p>\n
The Thai Rubber Association has projected that Thai rubber
\nexports during the second quarter of the year will slide by
\nalmost 15 percent to 270,000 tons due to sluggish demand.<\/p>\n
In Indonesia, a deal was done at 48.00 U.S. cents a lb FOB
\nPalembang for July\/August shipment.<\/p>\n
Offer prices, though, were heard at 48.50 cents in Palembang
\nand Padang, 48.75 cents FOB Medan, 48.25 cents FOB Surabaya and
\n47.75 cents FOB Pontianak and Jambi.<\/p>\n
\"Many traders are willing to wait a little bit longer for
\nprices to go up further. Tight supply of raw material also
\nboosted sentiment,\" a dealer in Indonesia said.<\/p>\n
In Malaysia, shortcovering for the popular SMR20 grade rubber
\nwas seen, but trading was thin due to soft demand.<\/p>\n
\"It was more of an adjustment due to higher regional prices,\"
\na trader in Kuala Lumpur said, referring to the rebound in the
\nmarket for four consecutive days last week.<\/p>\n
The Malaysian Rubber Exchange and Licensing Board (MRELB)
\nquoted the benchmark RSS1 for June buyer at 275.50 Malaysian
\ncents a kg at the close of the market last week, down 0.50 cents
\nfrom the previous week.<\/p>\n
SMR20 rubber for June buyer was quoted at 262.50 cents a kg,
\nup three cents. Traders said SMR CV was offered at 273 cents, SMR
\nL at 309 cents, SMR 5 at 273 cents, SMR 10 at 263 cents and drum
\nlatex at 230 cents.<\/p>\n
The dealers said supply of raw materials in Malaysia remained
\nstable, despite persistent rains in the last two weeks.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/se-asian-rubber-prices-may-rise-with-thai-buying-1447893297",
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