SE Asian rubber prices predicted easier this week
SE Asian rubber prices predicted easier this week
SINGAPORE (Reuter): Southeast Asian rubber prices are expected
to remain soft this week with foreign buyers largely out of the
market and demand at a low ebb, traders said yesterday.
In Malaysia, dealers forecast prices would fall by an average
of three to five cents per kg for each grade.
"All overseas buyers seem sidelined at the moment," one dealer
said. "We haven't got anything from the Middle East, China, U.S.
or Europe."
At the close on Friday, the Malaysian Rubber Exchange and
Licensing Board quoted the July RSS1 buyer price at 263.50
Malaysian cents (US$1.04) a kg and the July SMR 20 buyer price at
245.50 cents.
Compared with the previous Friday, RSS1 was down 12.50 cents
while SMR20 fell 8.0 cents.
Indonesian traders said they expect offer prices for benchmark
tire-grade SIR20 to soften this week amid generally bearish
market sentiment.
"In general, we are still trying to compete with Thailand and
Malaysia, which are offering lower prices. We expect prices to
fall again next week because of this situation," one said.
Traders said SIR20 finished the week at 45.25 U.S. cents/lb
FOB Medan for October shipment and at 45.00 cents FOB Medan for
September shipment.
In Palembang, traders offered SIR20 at 44.75 cents for
September/October shipment, while offer prices were quoted at
45.00 cents FOB Surabaya and at 44.00-44.25 cents FOB Pontianak
and Jambi.
Traders in Bangkok said Thai rubber prices had slipped further
amid poor demand.
A Thai government official denied market talk that it might
have started releasing its stocks into the market. The rumors had
been putting pressure on prices.
"It is not our intention to sell when the prices are still on
a downtrend. Otherwise, what is the point of intervening in the
first place," said a senior agriculture ministry official.
The official told Reuters the government would continue its
purchases from local producers at least until the end of July.
He declined to say how much had been bought since the
intervention scheme began in May, but industry sources estimated
the purchases at between 15,000-20,000 tons.
Industry sources were lukewarm to the government's attempt to
support the market and did not expect any radical improvement in
the situation.
Some Indonesian traders said supplies of raw material were
still tight in a number of centers, but this was not impacting on
prices.
"Buyers usually do not care when we say that supply is tight.
They can always choose from which center they want to purchase
rubber. If, for instance, traders in Palembang do not want to
sell, buyers can contact those in Medan," one said.
"I don't think buyers are going to come in this week or prices
are going to strengthen much, even on technical," said a
Malaysian trader.
"All in all, we might see a fall of three to five cents
through the week," he added.
A check with Malaysian trading houses before Friday's close
showed the SMR 20 being offered at 245 Malaysian cents a kg, SMR
10 at 246, SMR CV at 313, SMR L at 292 and drum latex at 214.
Traders said stocks of latex and other materials were still
plentiful in the Malaysian market, although scattered tropical
showers in the past week had slightly restrained rubbing tapping.