France's Michelin bought tyre-grade rubber from Indonesia on Wednesday to take advantage of a price dip blamed on rising supplies in Southeast Asia, dealers said.
The world's largest tyre maker bought SIR20 at 69.50 and 69.75 US cents per lb ($1.53 and $1.54 a kg) free on board Palembang in South Sumatra for January shipment. The grade was offered at as high as 72 US cents last week, they said.
US buyers also purchased December SIR20 at 69.50 US cents per lb free on board Palembang on Tuesday, when Japan's largest tyre maker, Bridgestone Corp, bought some rubber at around 69 US cents per lb for January, dealers said.
"It looks like raw material has improved. Foreign dealers are in the market to replenish stocks and they think the price is attractive," said one dealer in Padang, the provincial capital of West Sumatra.
Indonesia is the world's second-largest rubber producer after Thailand.
The prospect of rising supplies in Thailand and Indonesia has depressed rubber prices in recent days. Dealers said heavy rains have subsided in some growing areas in Thailand and allowed tapping to resume.
The price of natural field latex, the raw material for Thai 60-percent concentrated latex, fell to 59 baht ($1.43) a kg from 60 baht last week, they said.
Tyre-grade Standard Thai Rubber, or STR20 block, edged up to $1.58 a kg from $1.57 on Tuesday but dealers said the increase was mainly due to a rebound in Japanese rubber futures.
"There's a technical rebound in Japan because the market has been in oversold territory but I guess this will be temporary," said one dealer in Thailand's southern town of Hat Yai. "I think by next week, we should see more rubber coming into the market."
The benchmark April 2006 contract on the Tokyo Commodity Exchange (TOCOM) rose 1.3 yen per kg to 188 yen in afternoon trade, reversing a 2-day losing streak.
But a rebound in Tokyo failed to trigger buying in Shanghai futures, which normally track the Japanese market. The most active March rubber contract on the Shanghai Futures Exchange fell 140 yuan per tonne to 16,845 yuan in afternoon trade.
In Malaysia, tyre-grade SMR20 fell to $1.56 a kg from $1.57 a kg for December delivery.
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