China sells cargo of tyre grade from warehouse; Thai RSS3 steady

01 Jan, 2012

China sold some cargoes of tyre grade from the country's bonded warehouse to ease inventory, while a few deals for forward shipments were struck in the last trading week of the year, dealers said on Wednesday. Thai RSS3 changed hands at $3.36 a kg without freight for February in overnight deals, steady from $3.35 to $3.36 last week. Another Thai grade, STR20, was sold at $3.35 a kg, down slightly from $3.36 last week, but there were no details on the buyers.
"Thailand has been selling STR20 aggressively in the last two months, partly because they have enough supply of raw material," said a dealer in Singapore. Thailand, the world's biggest rubber producer, expects output of around 3.15 million tonnes in 2012, about 5 percent more than the 3.0 million estimated for 2011 despite heavy rains, according to the Thai Rubber Association.
RSS3, the benchmark physical price in Asia, has dropped by nearly half from a lifetime high of $6.40 per kg in February, in large part due a debt crisis in Europe, which threatens to curb demand for commodity. In other grades, Indonesia's SIR20 for February was traded at 153.50 US cents to 154.25 cents a pound ($3.38 to $3.40 a kg), hardly changed from 154 a pound sold last week.
The buyers were trading houses in Singapore, which normally sell rubber to China, the world's largest rubber consumer. The price of SIR20, which used to be the cheapest grade in Southeast Asia, began to surpass Thai rubber in early October after a dry wintering season in the southern part of the main growing island of Sumatra curbed the flow of latex.
Malaysia's SMR20 was traded at $3.35 for February shipment, but dealers said Southeast Asian tyre grades kept at China's bonded warehouse in Qingdao were also being sold at a similar price, including freight. In October, buyers in China asked shippers in Southeast Asia to delay delivery of up to 7,000 tonnes of the commodity because of high inventory.

Read Comments