Regional rubber price rally seen shortlived

Regional rubber price rally seen shortlived

SINGAPORE (Reuter): Regional rubber prices are seen remaining
buoyant in the coming week but traders said further upside
potential is limited by prospects of a seasonal production rise
and a dearth of keen buyers.

"The market is due for a correction," said a trader at a U.S.
trading house in Singapore.

"Production is quite good in Thailand and the market has
discounted all the bullish factors."

"In the absence of heavy buying, the market may set back
slightly, reassess the position and make the next move."

Traders in Thailand, faced with a tight nearby supply
situation and difficulties of fulfilling outstanding orders, said
there were signs that prices were letting up after the recent
strong rally.

"Everyone wants it (prices) to slow down. How much higher can
we take this kind of prices?" one Bangkok trader said.

The Thai government moved this week to reduce its rubber
buying and began talks to find a solution to outstanding
government shipments of about 123,000 tones.

Trade sources said the Thai private sector was also faced with
difficulties in meeting its own contracted deliveries.

The main private sector contracts outstanding are to the
Japanese and Europeans, led by French tyre-maker Michelin