Thai rubber prices are likely to remain steady over the next few days, with increased supply balanced by strong overseas demand, traders said on Wednesday.
Supplies in Thailand, the world's top producer and exporter of natural rubber, improved this week after having been tight in the past few weeks due to heavy rain in the south, which produces about 90 percent of its natural rubber.
"The weather has been favourable with little rain this week. It is unusual, because southern Thailand is still in the rainy season," said one trader. The wet season began this month and runs through November.
The price of unsmoked rubber sheet (USS), the raw material for export grade rubber sheet, has been declining this week on increased supply, exporters said. USS3 was 47.52 baht per kg ($1.15/kg) on Wednesday, down from 47.64 on Tuesday.
It was almost 48 baht last week. "If the weather continues like this, we expect more supply to hit the market later this week," said one exporter in the southern town of Hat Yai.
Many Thai exporters have started selling rubber for 2005 shipments, traders said. Thai RSS3 rubber sheet was $1.28 per kg, free on board (FOB) for January shipment.
No prices for January shipment were offered last week.
Thai 60 percent concentrated latex was offered at $850 per tonne FOB in bulk for January shipment and Thai STR20 block was $1.26 FOB. Malaysia's SMR20 block was $1.25-1.26 FOB, while Indonesia's SIR20 block was $1.21 FOB.
Thailand, Indonesia and Malaysia account for 60 percent of the world's natural rubber. Trade has been active with many overseas buyers, including Chinese, in the market this week, dealers said.
"Many Chinese buyers need rubber for prompt shipment. They are running out of domestic stocks," said one trader.
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