Asian rubber outlook remains bullish

Asian rubber outlook remains bullish

SINGAPORE (Reuter): The outlook for Southeast Asian rubber
prices remains bullish this week with monsoon rains seen delaying
tapping and curtailing raw material supplies across the region,
traders said yesterday.

"The producers played their game very well last week after
being too willing to sell previously," a Malaysian trader said.

"They're not willing to sell now, saying they have exhausted
their stock. Those who want to buy are being quoted higher prices
and some are actually taking because they can't wait."

At the close of the market on Friday, Malaysia's benchmark
RSS1 was quoted at 330 Malaysian cents (US$1.32) a kg with the
SMR20 at 314 cents ($1.26) a kg, both for September buyer.

"I expect the RSS1 to trade between 330 to 350 this week and
SMR20 at 315 to 320," said a dealer. "The market is upbeat now
and will stay that way."

Thai traders in the southern Hatyai market said they also
expected prices to firm this week as scattered daily rains in
most southern provinces last week had prompted smallholders to
delay domestic sales in the expectation of better prices.

They said moderate rains hit major rubber growing provinces
including Trang, Surat Thani and Songkhla.

Last week, Thai rubber prices eased on limited Japanese buying
interest for near term shipments and in the absence of big
Chinese forward orders.

"Japanese buyers are already well stocked for September and
October and they are now buying ahead for December and January,"
an exporter said.

Few exporters also now expect the Thai government to re-enter
the domestic market to help boost local prices as predicted
previously, as the weather already appears to be underpinning the
market and doing the job for them.

Thai benchmark RSS3 for October shipment eased to $1.24 kg FOB
Bangkok last week from $1.28 in the previous week.
December/January delivery fell to $1.28 kg from $1.31-1.32.

In Indonesia, benchmark tire-grade SIR20 prices are also seen
staying firm this week on expected reduced supply due to heavy
local rains and sustained buying from U.S. firms.

"Prices are likely to stay firm, but the offtake is unlikely
to be that much after recent active buying," one dealer in the
north Sumatran city of Medan said.

One Jakarta-based dealer said the recent active buying,
particularly by U.S. firms, was mostly on short-covering
triggered by the rains in parts of Indonesia and in Thailand.

Dealers said SIR20 offer prices for October deliveries were
likely to be in the range between 55.50-56.25 U.S. cents/lb fob
Medan, 55.50-56.00 cents fob Palembang, Surabaya and Padang, and
at 55.00-55.75 cents fob Jambi and Pontianak.

Another dealer in Medan said he was negotiating to sell a 100
tons SIR3CV a month to the U.S. over 12 months next year.

He said he expected to reach an agreement soon.

The dealer declined to reveal the expected price of the deal,
but he said SIR3CV was last traded at 140 cents/kg down from the
previous 151 cents due to weak demand.

The latex market was likely to stay quiet with volume
committed for September deliveries seen remaining largely
unchanged against the August figures, dealers in Medan said.

Some 2,000 tonnes of high ammoniac grade latex, with 60
percent dry rubber content, were committed for August deliveries
for north Sumatran firms, they said.

High ammoniac grade latex was seen on offer at Rp 2,350/kg in
the west Java city of Bandung against the previous Rp 2,400/kg.