SINGAPORE: Prices for rubber cargoes in Asia picked up this week amid shorter supply of raw material in Indonesia and expectations of tightness elsewhere, while buyers were scarce in top consumer China ahead of the Lunar New Year break, traders said.
Wintering has begun in North Sumatra, a key rubber producing region in Indonesia, a period when rubber trees become drier, said a trader from the Indonesian province of Riau. Wintering in that region usually lasts through May, underpinning prices.
"At this stage, with wintering starting, it's difficult to push prices to the $1.40 level. Also, demand is there although buyers were not so aggressive this week," the trader said.
Indonesian tyre-grade rubber SIR20 traded between $1.44 and $1.45-1/2 per kilogram this week, the trader said, up slightly from the previous week.
In Thailand, the RSS3 grade was sold between $1.83-$1.85 per kg, also higher from last week.
"It's partly because of the Thai government buying in the local market, that helps reduce available supply," said a trader from the southern Thai city of Hat Yai.
"And as we go nearer to the wintering months, the market is naturally pricing in smaller supplies," he said.
Thailand, the world's No. 1 rubber producer and exporter, late last year announced measures to support local farmers including through subsidies and by purchasing their rubber.
That helped repair sentiment in a market that had been hit hard by excess supplies and weak demand, particularly in China, fuelling a recovery in global prices from five-year lows reached in October.
Japanese rubber futures climbed to a 10-month high on Friday, aided by a rally in crude oil prices. The rubber futures have gained more than 5 percent this week.
There were few Chinese buyers in the market ahead of a week-long Lunar New Year holiday that starts on Feb. 18, traders said.
Comments
Comments are closed.