SE Asian rubber prices may plunge this week
SE Asian rubber prices may plunge this week
SINGAPORE (Reuter): Southeast Asian rubber prices are seen falling this week, traders said yesterday, and demand is expected to remain sluggish as the market focuses on the Tokyo futures' spot contract expiry today.
"The market is slow and traders are waiting for prices to come down," a dealer in Singapore said. "Japan's expiry on Tuesday is also keeping some traders sidelined."
Singapore and Thai dealers said there were some short-covering by Japanese and European traders, but volumes were not enough to give the market a boost.
"The Europeans started buying before going on holiday so they won't have to worry about positions," said a trader in the Thai rubber center of Hat Yai. "Overall the market is bearish."
"I don't anticipate any new leads that will move the market up near-term," another Thai trader said.
Malaysian traders said the onset of the summer holiday period in the United States and the general reluctance of buyers to enter the market was generating widespread expectations of further price falls this week.
"I think we'll see a daily fall of between one to two cents in the RSS1 and SMR20, unless there's some technical propping-up done," one Malaysian trader said.
Indonesian traders said prices for the benchmark tire-grade SIR 20 were forecast to soften further this week and could drop to as low as 44.00 U.S. cents a pound.
They said SIR 20 finished last week at 45.25 cents free on board (FOB) Palembang for August to September shipment and at 45.75 cents FOB Medan. Offer prices were quoted at 45.50 cents FOB Padang and Surabaya and at 45 cents FOB Pontianak and Jambi.
Thai benchmark RSS3 for August delivery was seen at around 108.00 to 108.50 cents per kg FOB Bangkok compared with last week's 112 cents.
September was quoted around 109 cents on the same basis against 112.50 cents a week earlier.
At Friday's close, the Malaysian Rubber Exchange and Licensing Board July RSS1 buyer was seen at 276 cents a kg against 282.50 cents the previous week and July SMR 20 buyer was at 253.50 cents against 258.50 cents.