Thai rubber prices upside limited as RI stays cheap<\/p>\n
SINGAPORE (Reuters): Thai rubber prices are unlikely to climb
\nfurther despite talk of tight raw material supply as buyers are
\nreluctant to chase rates up in view of low-priced offers from
\nIndonesia, traders said on Monday.<\/p>\n
They said Thai benchmark RSS3 sheet rubber was offered at 62
\nU.S. cents per kilo for August, compared with 60 cents a week
\nago, as raw material prices rose after a brief decline.<\/p>\n
It was seen last traded at 61.50 cents on Friday.<\/p>\n
\"Prices for RSS3 are unlikely to drop in the near future,\"
\nsaid a trader. \"But you'd need buyers to push them up further.
\nIt's doubtful if buyers would follow through. Thai rubber is
\nalready the most expensive available.\"<\/p>\n
Traders said rains, coupled with a sharp rebound in Tokyo
\nfutures ahead of the June expiry on Monday, pushed up prices for
\nunsmoked rubber sheet (USS3) towards 25 baht (55.3 U.S. cents)
\nper kilo and above from around 24 baht (53.1 cents) last week.<\/p>\n
Last month, USS3 hit 27 baht -- its highest level since July
\n1998 -- before easing some 10 days ago.<\/p>\n
Traders are not certain if the raw material supply was really
\ntight again, or if farmers and middlemen were holding back USS3,
\nencouraged by Tokyo futures and ahead of Bangkok's decision on
\nthe government intervention scheme expected later this week.<\/p>\n
They said there was market talk the government would raise the
\nintervention price from 24 baht now, in view of recent high raw
\nmaterials prices.<\/p>\n
The Thai cabinet is to discuss whether it should extend the
\nscheme, set to expire at the end of the week.<\/p>\n
\"It is one indicator for the prices,\" said another trader.
\n\"We could not get raw materials at prices below 24 baht even when
\nraw materials prices eased.\"<\/p>\n
Traders said buyers, including tyre makers and China, were
\nturning to Indonesia as it offered SIR20 at 23 U.S. cents per
\npound -- 50.70 cents per kilo -- or slightly below for August.<\/p>\n
\"Both tyre makers and dealers are very keen at prices below 23
\ncents,\" said the second trader. \"Also China is a regular buyer of
\nSIR20.\"<\/p>\n
Traders said major tyre makers were covering their needs for
\nthe last quarter of this year in addition to purchases agreed
\nunder term contracts.<\/p>\n
Such buying helped firm up SIR20 prices, which hit fresh 30-
\nyear lows of around 21.50 cents in April, but raw material prices
\nin Indonesia remained low, they said.<\/p>\n
The traders saw China placing orders unabated in Indonesia
\ndespite its agreement with Bangkok to buy 50,000 tonnes from
\nThailand in a government-to-government deal.<\/p>\n
Chinese customs data showed last week that the country
\nimported 340,000 tonnes of natural rubber during the first five
\nmonths of this year, up 15.6 percent on the year. Its imports
\ntotaled 70,000 tonnes in May alone.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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