S'pore rubber futures up as China's demand rises

S'pore rubber futures up as China's demand rises

SINGAPORE (Reuter): Singapore rubber futures closed higher yesterday, but off the day's peaks at the close with some Japanese brokerages saying that sentiment was being helped by talk of fresh Chinese buying enquiries, brokers said.

"The market is higher because of China inquiring heavily for Thai and Indonesian rubber yesterday and today," a trader at a Japanese brokerage said. But some dealers in Singapore said they were not aware of such rumors.

The Japanese house's trader said China was buying Indonesian Nov/Dec SIR20 rubber FOB Padang at 64 U.S. cents a lb. "I heard 2,000 tons of rubber was traded and a further deal of 2,000 tons is going on."

But a Singapore dealer said: "Padang was traded at 62.50 cents yesterday and I doubt the Chinese are willing to pay 64 cents."

The Japanese brokerage trader said he also heard Chinese buyers were seeking to buy 5,000 tons Thai Dec RSS3 although he said other sources put the number at 10,000 tons.

Thai RSS3 offers were seen at 151 U.S. cents a kg this morning and traders said sellers turned scarce in the afternoon after sharp gains on the Singapore futures. China last entered the market two weeks ago, buying Thai rubber at about 140 cents.

In Kuala Lumpur fresh buying interest and shortcovering by China, coupled with a steady Tokyo market, pushed up rubber prices, dealers said.

"The market is firming on reports of fresh buying and shortcovering activities by China," one trader said.

"They are aggressively looking to buy SMR 20 for Nov/Dec shipment." Some quantities have been traded but dealers could not give more details as none of it was tendered.

Chinese buyers returned to the market yesterday, after staying away in recent days, making fresh purchases to replenish its stocks, traders said.

Some dealers said that China bought more than 20,000 tons of rubber in Thailand, Indonesia and Malaysia for October/November shipment last month.

A steady Tokyo market rose on a weaker yen versus the U.S. dollar. European buyers were seen covering their positions for SMR CV, SMR L and SMR10 for nearby shipment.

"The wet weather is still a bullish factor and rains keep falling in major rubber growing areas in Malaysia," one dealer said, estimating falls of up to 45 percent in September/October output. Dec RSS 1 buyer rose a cent to 377.50 cents ($1.48) a kg and Dec SMR 20 buyer was up 3.50 cents at 362.50 cents.