Rubber trade wary of currencies, Thai stocks
Rubber trade wary of currencies, Thai stocks
SINGAPORE (Reuters): The Southeast Asian rubber trade will be
dogged this week by the region's wobbly currency markets even
though some Japanese buyers were said to be keen about picking up
forward supplies, traders said yesterday.
The trade is also keeping a wary eye for any bit of news on
whether Thailand will make a decision to sell all or part of its
110,000-ton buffer stock soon, they said.
"People are still watching the currency markets," a dealer for
a rubber trading house in Singapore said. "That's still the focus
of the business."
A trader from the Thai rubber center of Hat Yai said the
gyrations of the baht last week had driven "some buyers and
sellers out of the market, guessing where the price should be."
There was good demand for March/April rubber, said an official
at a Japanese trading firm in Thailand, the world's biggest
producer of natural rubber.
"We could have bought more if it was not because of the
renewed baht volatility. Some buyers expected the prices to ease
further," he said.
People were also waiting for a decision by Bangkok on what to
do with its rubber stockpile. Traders said a sale would hammer
prices further.
"Everybody's in the dark on what Thailand's going to do," a
Japanese trader said, adding Thai industry officials at an
industry dinner in Malaysia on Friday "were themselves unsure
what the Thai government will do on the matter".
Indonesian and Singapore-based traders expect demand and
prices to remain weak while the Malaysian rubber trade is more
optimistic prices will be steady to firm.
"We expect prices to fall further this week. The aggressive
selling of good quality STR in Thailand has dampened the market
sentiment here," said one trader in Indonesia.
"Some of these guys have already bought forward so I don't
think the buying will pick up this week," a dealer in Singapore
added. "I don't expect stronger demand."
Indonesian traders were distressed when they heard that rubber
was being sold at 39.25 U.S. cents/lb for January, but admitted
weak buying was the main factor for the soft prices.
Malaysian traders said, however, that tight supplies towards
the year-end may prompt fresh inquiries in the market and help
shore up prices.
"Some consumers need to meet their yearly-buying program and
we hope to see European business before the year-end holidays,"
one dealer said.
"They (buyers) will be looking to cover until December for
sheet and SMR grades, and start making fresh commitments for next
year's early positions," he added.
In Indonesia, offer prices for December shipment were quoted
at 39.50 cents FOB Medan, 39.25 cents FOB Padang and 39.00 cents
FOB Pontianak and Jambi.
The Malaysian benchmark RSS1 buyer was up 3.50 Malaysian cents
at 293.00 cents a kg at the close of trade last Friday.