Asia Rubber-Tyre grades edge lower; China stockpiling plan puzzles

Reuters

* SIR20 sold at 104.25-104.50 cents/lb

* RSS3 untraded late on Tuesday, STR20 at $2.38-$2.42/kg

* SMR20 done at $2.43-$2.44/kg

By Lewa Pardomuan

SINGAPORE, Oct 30 (Reuters) - Falling rubber prices spurredbuying from trading houses this week but buyers from China werenowhere to be found despite persistent rumours the country wasbuying Thai cargoes to build up stockpiles, dealers said onWednesday.

Talks first surfaced in mid-September that main rubberconsumer China plans to buy 50,000 tonnes of rubber from theoverseas market, most likely the Thai RSS3 grade, and the restlocally, but dealers have been unable to confirm any purchases.

Thai, Indonesian and Malaysian tyre grades changed handsamong trading houses at between $2.29 and $2.44 a kg forDecember delivery in a series of deals late on Tuesday.

"I think the market is getting tired of these rumours onstockpiling," said an analyst in Tokyo.

"Without fresh leads, I don't think the market can movehigher," said the dealer, referring to benchmark rubber futureson Tokyo Commodity Exchange.

The most active April contract on TOCOM climbed 1percent in early trade to a high of 264.8 yen ($2.69) a kg on a weaker yen. Prices have dropped more than 12 percent thisyear, partly due to global economic worries.

Shanghai rubber futures, which often influence theTokyo market, added 275 yuan to 20,045 yuan ($3,291) a tonne.

"What I understand is Shanghai futures were very high. SoChinese dealers were able to buy the RSS3 from Thailand andtender into Shanghai," said a dealer in Singapore.

"But that was the main game early on," said the dealer,adding that talks about the stockpiling have yet to subsidedespite a lack of evidence of China's purchases.

China imported 1,666,815 tonnes of natural rubber in Januaryto September this year, up 5.5 percent from the same period lastyear. It mainly buys rubber from Thailand, Malaysia, Indonesiaand Vietnam.

Thai RSS3 was offered on $2.50 a kg on Wednesday, down fromlast week's traded prices of $2.575. Another Thai grade, STR20,was traded at $2.38 to $2.42 a kg late on Tuesday.

Dealers shrugged off a plan by Thai rubber farmers tointensify protests after the government rejected their calls forBangkok to buy their output at prices higher than the market.

Angered by steep falls in prices, the farmers want thegovernment to buy rubber sheet from them at 100 baht ($3.22) perkg, more than a third higher than the market price on Tuesday of72 baht. They have snubbed a subsidy offered last month.

Indonesian SIR20 grade was sold overnight at 104.25 U.S.cents a pound to 104.50 cents for December delivery ($2.29 to$2.30 a kg), down from between 105.75 and 107.25 cents a poundlast week.

Malaysian SMR20 was traded at $2.43 to $2.44 a kg, down from2.465 a last week.

WEEK AHEAD

Next week, tyre grade prices are likely to track thefortunes of TOCOM rubber, which is often influenced bymacroeconomics, currencies, equities and crude oil.

($1=98.14 yen)

($1=6.09 yuan)

(Editing by Tom Hogue)

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