Rubber prices may soften on rupiah fall

Rubber prices may soften on rupiah fall

KUALA LUMPUR (Reuter): Malaysian rubber prices were firm yesterday but dealers said they expected the market to soften later this week or even next based on the weakness of the Indonesian rupiah.

At midday, the Malaysian Rubber Exchange and Licensing Board quoted the RSS1 for September buyer at 250 cents (90 U.S. cents) a kg, up half cent from Wednesday's close.

The SMR20 for September buyer was unchanged at 248.50. For Aug/Sept, trading houses were offering the SMR 20 at 247 cents a kg, the SMR CV at 289 cents, SMR L at 272, SMR 5 at 262, SMR 10 at 248 and drum latex at 190.

In Singapore, rubber market was quiet with the trade digesting news that Bank Indonesia has scrapped announcing its intervention and conversion bands on the rupiah, dealers said.

At around 0445 GMT, September TSR20 was indicated at 93.00- 95.00 U.S. cents a kg from 95.00 cents.

In Jakarta, Indonesian tire-grade SIR20 rubber prices were generally stable in early trading with buyers expected to take the opportunity to press for cheaper prices because of the falling rupiah, traders said.

"Buying interest is very thin today and traders are monitoring the rupiah, which is volatile today. Traders were busy offering rubber but no buyers have showed up so far. Buyers are taking the chance to pressure the price," said one trader in Jakarta.

Rubber traders said offer prices were quoted at 42.00 U.S. cents/lb fob Padang for September shipment, at 41.50 fob Pontianak and at 42.25 fob Padang for October shipment.

October shipment was quoted at 42.50 fob Palembang, at 42.75 fob Medan. at 42.00 fob Jambi and at 42.50 for November shipment.