Blog yOur Mind

Asia rubber-tyre makers buy forward cargo, China chases SIR20

Posted on: April 2, 2009

Reuters – Thursday, April 2

  • Tyre makers buy July-Sept cargo
  • China chases SIR20, deals done at 61 cents/lb
  • Wintering curbs supply in Thailand, Malaysia

By Lewa Pardomuan

SINGAPORE, April 1 – Major tyre makers struck deals to buy rubber for forward shipments, while main consumer China was chasing cargoes from Indonesia, which offers the cheapest material in Southeast Asia, dealers said on Wednesday. On the supply front, farmers in Thailand and Malaysia will resume tapping in the middle of April, when rubber trees start producing latex again after a halt in the dry wintering season in March, dealers said.

Bridgestone <5108.T>, the world’s largest tyre maker, bought Indonesia’s SIR20 at 60.75 U.S. cents per pound ($1.34 a kg) for July shipment on Wednesday. It bought Thai RSS3 at $1.475 for September earlier this week, dealers said.

Goodyear Tire & Rubber Co <GT.N>, the largest U.S. tyre maker, also struck some deals but there were no details on prices and quantity, they said.

“We still see buying interest from Goodyear, and Bridgestone in particular is quite active in the forward months. But I must say the price is not too attractive,” said a dealer in Indonesia’s main growing island of Sumatra.

SIR20 was sold to Singapore dealers at 61.00 U.S. cents per pound for May shipments late on Tuesday and at 61.50 cents for June. Singapore dealers normally sell rubber to China, which is stocking up after the Lunar New Year holidays in January.

At around $1.36 a kg, Indonesia’s SIR20 grade was cheaper than Thailand’s RSS3 and Malaysia’s SMR20 grades which were offered at $1.55 a kg.

Dealers said supply was ample in Indonesia, where dealers were happy to offer rubber at a discount to Thai and Malaysian grades. Thai RSS3 for April/June was bid at $1.50 to 1.52 and there were no deals.

“Wintering is still happening and I guess we have to wait for another two weeks before supply slowly returns to the market,” said a dealer in Thailand’s southern city of Hat Yai.

“There’s some interest from tyre makers for forward shipments but I think the market still focuses on China,” he said. Tokyo rubber futures may slip in April as more bad news from the U.S. car sector heightens worries about slumping demand for tyres, but purchases from China could prevent prices from falling below 150 yen, a Reuters poll showed.[RUB/POLL]

Tokyo futures set the tone for physical prices.


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