RI's haze feared affect rubber supply

RI's haze feared affect rubber supply

SINGAPORE (Reuter): The Singapore rubber trade cast a wary eye on forest fires raging in Indonesia with some of the trade saying yesterday that producers there were using the blaze as an excuse not to lower their prices.

"These guys are not lowering their prices because some of them are citing these fires and are saying it might come close to the plantations. We know its very dry, but that possibility sounds seems unlikely," a dealer said.

Choking smog from those forest fires have thrown a leaden gray smog over most of Southeast Asia. Some dealers said this may have a long-term impact on supplies in the rubber market.

Action in the local market was fairly thin, with only some light shortcovering seen for RSS3 rubber and little else in the other rubber grades, dealers said.

"It's very thin. I think Michelin has almost finished its buying program and will wait until next week before coming in," a trader said. Michelin was said looking for November RSS3 at 85 U.S. cents a kg, but the trade found the offer too low.

At around 0945 GMT, December RSS3 was seen at 90.50 U.S. cents a kg from 90.75 cents.

In Jakarta, Indonesia's tire-grade SIR20 offer prices were flat in late morning trading on Thursday as a bearish outlook continued to drag market sentiment down, traders said.

"Trading is becoming more and more lethargic. The outlook remains bearish and we don't see any fresh leads which can cheer us up," said one trader in Palembang in South Sumatra province.

Traders said they news of a possible sales from the Thai government rubber stockpile, estimated at 110,000 tons, had some effect on the market.

"I am sure that sooner or later Thailand will sell stocks. It is only a matter of timing, especially as the country is heading for an election," said one trader.

"We have a more bearish trend because of the Thailand factor," he said.

Traders said trading was very quiet despite sporadic sales in the previous days. They said offer prices were quoted at 39.50 U.S. cents/lb for November shipment.