Asian rubber price outlook stays bearish

Asian rubber price outlook stays bearish

SINGAPORE (Reuters): The outlook for the Southeast Asian
rubber market continues bearish this week, with the market likely
to be pulled down by further falls in Tokyo rubber futures,
dealers said yesterday.

Asked where the regional rubber market will head this week, a
trader in Singapore said: "Down, down."

"It seems nothing can stop the market's slide with Tokyo
(rubber) heading down...and Thailand deciding to sit on its
122,000-ton rubber stockpile," the trader said.

Japan's benchmark May rubber futures sank to a new 3-1/2 year
low of 98.3 yen per kilo last week.

Traders in the region said the Southeast Asian rubber market
will take its cue from the Japanese market due to lack of fresh
incentives to boost sentiment.

"Bearish Tokyo will put pressure on our rubber prices as
well," said a trader in Thailand.

"We expect the market to be quiet because of lack of fresh
factors," a trader in Indonesia said.

"There is an expectation the market in Tokyo will be affected
by the movement of the yen against the dollar and this will have
some impact on the local market in terms of sentiment," the
Indonesian trader added.

In Malaysia, traders expected buyers to remain on the
sidelines despite tight supplies.

"Producers are not selling aggressively as there is not much
to sell amid tight supply due to weather problems, while most
buyers have already covered their positions for the year," said a
trader in a Malaysian plantation firm.

"December is going to a quiet month."

Malaysian rubber prices are expected to drift at current
levels because of the reluctance of producers to sell
aggressively amid a supply shortage due to monsoon rains, dealers
said.

"Everyone seems to be tight. Yes, we can buy raw material from
Thailand but it will be more expensive due to (the) currency
exchange," the Malaysian trader said.

The monsoon rains have started in Malaysia and would continue
till January, dealers said.

"This has already started hitting output in some (rubber)
growing areas in Malaysia," said one trader.

On Friday, the buying price of Malaysia's benchmark December
International Ones RSS was up 1.50 Malaysian cents to 277 per
kilo compared to a week before.

Other countries in the region also expected low trade volumes
this week.

"I don't expect the trade this week to be exciting," a trader
in Thailand said.

On Friday, Thailand's January RSS3 rubber was quoted at 71.75
U.S. cents a kilo FOB Bangkok, traders said.

Indonesia's tire-grade SIR20 was expected to soften this week
due to poor demand.

On Friday, offer prices for February shipment were quoted at
37.625 FOB Medan, 37.50 FOB Palembang and Surabaya and 37.25 FOB
Pontianak and Jambi, traders said.

"The overall market sentiment will be soft (this week). There
is no sign of fresh leads which can boost the sentiment," said an
Indonesian trader.

"Some people believe prices will drop to 35.00," said another.