China chases tyre grade rubber

Singapore  (february 20, 2011) : china was chasing tyre grade rubber for forward shipments as it replenished inventories, and a few cargoes of indonesian supplies changed hands at near record levels on thursday. sir20 was traded at 258.50 us cents and 261 us cents a pound ($5.69 and $5.75 a kg), not far from monday's record at 262 cents. there were overnight deals for thai and malaysian grades at slightly higher prices.
"i sold sir20 at 261 cents a pound this morning. china is buying good tonnage every day," said a dealer in singapore, who mostly sells rubber to china. china, the world's largest rubber consumer, is likely to step up purchases in coming days on worries that physical rubber prices will rise further to track rallies in tokyo rubber futures, dealers said.
rubber inventories in warehouses monitored by the shanghai futures exchange fell 1.1 percent to 58,058 tonnes last week, raising the prospect of more buying by chinese consumers. persistent supply concerns and rising oil prices sent the most active contract on tokyo rubber futures, currently july 2011, to another record at 530.6 yen a kg.
sixth month tokyo rubber will pierce into a range of 576.90-600 yen per kg over the next four weeks, as the current wave "c" is expected to travel further, based on its wave pattern and a fibonacci projection analysis, according to wang tao, who is a reuters market analyst for commodities and energy.
global auto sales will increase 6 percent in 2011 to a record 76.5 million new light vehicles, j.d. power and associates said, adding that china, the no 1 auto market, will sell 6 million more vehicles in 2011 than no 2 united states. dealers said china was looking for april shipment while dealers also noted interest for either prompt and may delivery from other consumers.
erratic weather has sent physical rubber prices to record levels, and supplies are likely to fall further when the dry season starts in top producer thailand later this month. thai rss3 grade changed hands at $6.34 to $6.37 a kg late on wednesday for march/april shipment, while offers matched tuesday's all time high at $6.40 a kg. malaysia's smr20 was traded overnight at $5.75 a kg for may shipment.
week ahead china's demand is expected to stir up the physical market next week, but it may focus on the cheaper indonesian grade. sir20 was also sold late on wednesday at 256.50 cents, 257.50 and 258 cents a pound. "china is in the market, but i think they have to shop around to get the best prices," said another dealer in singapore.

(Source: http://www.brecorder.com/news/business-and-economy/world/1158039:china-chases-tyre-grade-rubber.html?hl=rubber)