Two major tyre makers have cancelled the purchase of an unspecified amount of Thai rubber for April due to sagging demand for automobiles, dealers said on Wednesday, but main consumer China was in the market to stock up. Last week, dealers said at least three tyre makers abandoned their long-term contracts to buy Indonesian rubber as a global economic downturn forced automakers to slash output, lay off workers and seek government aid.
"Two companies have cancelled April shipments for RSS3 and STR20. They say they cant take delivery," said a senior dealer at a trading house in Bangkok, hit by the cancellation. "It has never happened before, but I guess the economy is very bad now," said the dealer, adding that two tyre makers were based in Japan and Europe.
Despite the cancellation, dealers noted steady interest from China, where vehicle sales topped 800,000 units for the first time in eight months in February as Beijings policy initiatives aimed at boosting consumption lured buyers back to showrooms. Indonesias SIR20 was traded late on Tuesday at 55.00 to 55.25 US cents per pound ($1.21 to $1.22 a kg) for April shipments, while May was traded at 55.25 to 55.50 cents.
SIR20 for October to December was done at 57.50 cents. There were no reports of deals for Thai and Malaysian grades, which were being offered at a premium to SIR20. Thai RSS3 was unchanged at $1.44 a kg and STR20 barely moved at $1.35.
"Basically China is still in the market, buying rubber from dealers in Singapore or directly from producers," said a dealer in Jakarta. "But we also fear the auto industry effectively in a depression," he added. Chinas rubber imports in February fell 40 percent from a year earlier to 120,000 tonnes, the General Administration of Customs said on Wednesday, but February imports were twice as much as Januarys volume.
China returned to the physical market after the Lunar New Year holidays in January, buying rubber from Thailand, Indonesia and Malaysia to take advantage of a price drop blamed on the global economic downturn that threatens to cut global demand. Physical rubber price has lost more than half its value since hitting a 56-year peak above $3 in July. China imported 1.68 million tonnes of natural rubber in 2008, up 2.07 percent on the year.
Comments
Comments are closed.