Southeast Asian rubber prices firm, may ease
Southeast Asian rubber prices firm, may ease
SINGAPORE (Reuter): Torrential rains and tight supplies are expected to keep rubber prices strong in Malaysia and Thailand this week, but prices are seen easing if the weather improves, regional traders said yesterday.
Indonesian rubber prices are likely to be stable on the back of rising foreign inquiries and adequate supplies, they said.
"Supply is a bit tight and this could help prices this week," a Malaysian rubber trader said.
"Prices continued firm last week, especially for RSS-3 because of short supplies. Rain affected tapping and supplies stayed tight," a Thai rubber trader added.
But slack demand in China and the United States and reports that rains had eased over rubber plantations in southern Thailand and northern Malaysia should help cool off prices, Singapore- based dealers said.
"Prices should start easing soon if the weather holds up," a dealer in a European commodity house said. "Production is also improving and that should help."
Thai benchmark RSS-3 was steady, being offered around US$1.53- $1.54 FOB Bangkok for July/August shipment, similar to last week's price levels.
In Malaysia, prices could perk up especially if recent heavy rains return and restrict tapping activity, dealers said.
SMR CV was quoted at between 423-425 Malaysian cents per kg with SMR L at between 400-402 cents at the close of trading on Thursday ahead of the long holiday weekend in Malaysia.
The Malaysian Rubber Exchange and Licensing Board quoted June SMR CV at 422.50 cents and SME L at 400.50 on Thursday.
Indonesian rubber prices are likely to stay stable in the coming week amidst expectations of rising foreign inquiries and relatively adequate supply, dealers said.
"We are likely to see more Chinese inquiries this week following some bids in Medan late on Thursday, but they are unlikely to come in a big way," one dealer in Jakarta said.
Dealers said more inquiries were also likely to come from the United States on news of high rubber prices in Thailand, but they were unlikely to buy in large quantities.
They said SIR20 offer prices were seen ranging between 58.50- 59.50 U.S. cents/lb in the north Sumatran city of Medan, 57.50- 58.50 cents in Padang, Jambi and Palembang and 57.25-58.25 cents in Pontianak for July/August deliveries.
The traders added that supply was expected to be adequate in the coming week, with some regions such as north Sumatra seen producing more due to end of the wintering period and other regions seen having lower production due to heavy rainfall.
Latex dealers said prices of high amoniac grade latex, with 60 percent dry rubber content, were also seen stable at between Rp 2,450/kg-Rp 2,500/kg in Jakarta and Bandung.