Asian rubber prices are likely to stay in a narrow range in the next few days, with supplies in the region tight but overseas demand thin, traders said on Tuesday. Wintering, which causes rubber trees to shed their leaves and produce about 30 percent less latex than usual, is affecting yields in producing countries Indonesia and Thailand. Thailand is the world's top rubber producer and exporter, followed by Indonesia.
Fresh deals were reported in the Indonesian market, but overall sentiment remained bearish. "There's not enough latex and the wintering season still persists until next month or so. I'm only meeting previous commitments," said one Median trader in the main growing area in North Sumatra.
Tyre-maker Goodyear has recently bought Indonesian tyre-grade SIR20 at 53.75 cents/lb., or $1.19 per kilogram, free-on-board (FOB) Belawan, for June shipment. Recent losses in world prices have pushed down Indonesian and Thai rubber prices slightly despite lean supplies.
Indonesian May tyre-grade SIR20 contracts were offered more than three percent lower than earlier this month at 53.75 cents/lb., or $1.19 per kg, FOB Plumbing. June contracts were offered at 54 cents/lb. Thai RSS3 rubber sheet was offered at $1.32 a kg for June shipment, down from last week's $1.33 a kg FOB basis.
Thai STR20 block rubber was at $1.24 per kg FOB basis, down from last week's $1.28. Raw material prices in Indonesia were unchanged at 10,200 to 10,400 rupiah ($1.06 to $1.08) per kg.
All eyes are now on the unexpectedly dry weather in Thailand. The wintering dry season in southern Thailand, which started in February, a month than usual, was over. However, traders said they were still waiting for supply to bounce back.
"It is still very hot in growing areas. And rubber tapping cannot get back to full swing without rain," said one trader in the southern town of Hat Yai. "The price could hold steady or even move higher over the next few days, given that supply remains tight," said another trader.
One trader said he had heard Thai 60-percent concentrated latex in drum was traded this week at $980 a tonne FOB. Malaysia's SMR20 block rubber was offered at $1.24/kg.
Thailand, Indonesia and Malaysia account for some 60 percent of the world's natural rubber production. The price of unsmoked rubber sheet, the raw material used for export-grade rubber sheet, was down one baht at 47 baht from a week ago.