Producers bid on INRO rubber stock
Producers bid on INRO rubber stock
SINGAPORE (Dow Jones): Rubber producers who sold rubber to the International Natural Rubber Organization (INRO) are now keen bidders as the group seeks to sell off its buffer stock, exporters and traders told Dow Jones Newswires Wednesday.
A big Indonesian rubber producer, the PT Batanghari Group, bought one-third of the standard Indonesian rubber 20 grade that INRO sold Tuesday, PT Batanghari Director Asril Sutan Amir said.
He declined to specify the exact tonnage bought.
Asril is also chairman of the Rubber Association of Indonesia, or Gapkindo.
He added that PT Batanghari didn't just buy SIR20 that it had earlier sold to INRO, but also bought those from the other SIR20 producers.
"We need it for raw material," he said, adding that he predicts SIR20 for the January-March 2001 shipment will rise to 66.10 U.S. cents a kilogram, free-on-board basis soon because rains in Indonesia are cutting raw material supply there.
SIR20 for the December shipment was quoted at 62.80 U.S. cents/kg, FOB basis Tuesday.
The defunct INRO has been seeking bids everyday this week to sell its 138,000-metric ton buffer stockpile.
Tuesday, INRO sold some tonnage of ribbed smoked sheet rubber 3 grade of Thai origin and SIR20 at 61 U.S. cents/kg for the March 2001 shipment on an ex-warehouse basis, INRO Chief Executive Arch Roberts said.
INRO doesn't comment on the exact tonnage sold or who its buyers are, but various traders have estimated the group to have sold fewer than 1,000 tons of rubber Tuesday.
Market participants are expecting results of INRO's Wednesday request for bids later in the day.
Big rubber producers in Thailand and Malaysia are also said to be keen on buying INRO's stock, but only those it had earlier sold to the group, exporters and traders said.
Exporters said they are keen to buy their own rubber - "if it's cheap enough" - as they are confident of its quality.
However, they emphasized if they bought it, they would subject the rubber to quality checks before offering it to their customers.
"When we buy our rubber, we will have to check the quality first and tell buyers when we offer it to them that it was INRO rubber," said Von Bundit Co. Ltd.'s managing director Pongsak Kerdvongbundit.
"We're confident of our quality, but we're concerned about (INRO's) storage conditions," he said, adding that should the company discover its rubber's quality had deteriorated, it will use it instead for raw material.
Pongsak declined to say how much Von Bundit bid for its rubber, but traders said it is bidding at 54 U.S. cents/kg for the November shipment of RSS3 Wednesday, compared with 55 U.S. cents/kg Tuesday for the same shipment.
It is also said to be bidding 63.50 U.S. cents/kg for standard Thai rubber 20 grade, November shipment.