Market and product
Asia Rubber-Tokyo futures lift prices
* Thai grades unsold, TOCOM rebounds
By Lewa Pardomuan
SINGAPORE, June 20 (Reuters) - Singapore dealers chased Indonesian rubber on behalf of top tyre maker Bridgestone Corp for August delivery, industry sources said on Friday, while a few Malaysian cargoes changed hands this week, but business was lethargic in Thailand.
Tyre grade prices have regained strength after benchmark Tokyo futures rallied on firm oil prices, higher equities and a softer yen, moving away from near five-year low hit in early June. Tokyo futures tend to track other markets.
Indonesia's SIR20 was traded overnight at $1.73 to $1.74 a kg without freight, higher than $1.68 to $1.695 transacted last week. Malaysian SMR20 changed hands at much higher price, but there were no reports of deals for Thai RSS3 and STR20 grades.
Despite the deals, the rubber market was still under pressure due to concerns over economic growth in top consumer China, a global oversupply and a lack of margins for processors.
"I would say the demand is not there. Tappers and processors are complaining the market has no support," said a physical dealer in Singapore.
"Rubber tappers' income are so low and they can't survive. China is showing some interest but their price is too low, and it's at least $50 a tonne below the market."
Inventories in warehouses monitored by the Shanghai Futures Exchange have slipped to their lowest since November at about 149,000 tonnes, but stocks in the bonded warehouses in Qingdao remain high and are estimated by dealers at more than 300,000 tonnes. SNR-TOTAL-DW
The most active rubber contract on Tokyo Commodity Exchange, currently November, is still down more than 23 percent so far this year despite a recent rebound.
A fresh round of selling on TOCOM could drag down the TSR contract on Singapore's SICOM exchange, which covers SIR20, SMR20 and STR20 grades.
SMR20 changed hands at $1.82 a kg late on Thursday, but the quantity was small and it could be a one-off deal given the high price compared with Thai grades. SMR20 was sold at $1.77 a kg last week.
RSS3 was offered at $2.15 to $2.17 a kg for August, higher than $2.02 to $2.03 last week. STR20 was quoted at $1.79 to $1.80 a kg, almost matching the production cost of about $1.80, said dealers.
"Wintering is over and supply is very good," said a dealer in Thailand. "I heard that Indonesian rubber has been traded, but it's very quiet here."
Rubber is tapped year round but latex output drops during the dry wintering season, when trees shed leaves. Wintering in Thailand and Malaysia lasts from February to April. In Indonesia, wintering lasts from February to May before starting again in July through September.
