Bridgestone Corp, the world’s largest tire maker, purchased Indonesian rubber for nearby shipments at prices below 100 U.S. cents a pound, offering some respite to an otherwise depressed physical market, dealers said.
SIR20 for March/April delivery was sold to the company at 97.75 U.S. cents a pound ($2.15 a kg) in a series of overnight deals. The grade was also sold at $2.15 to $2.155 a kg to trading houses in Singapore.
“Bridgestone has bought some rubber but the market is still under pressure. It’s falling again today,” said a dealer in Indonesia’s main growing island of Sumatra, referring to benchmark Tokyo rubber futures.
Last week, the Indonesian grade changed hands at 99.00 to 99.25 cents a pound, its weakest level since the middle of last year and below the key psychological level of 100 cents.
There were no reports of overnight deals for Thai grades, but RSS3 was offered at $2.20 a kg and STR20 at $2.15 on Wednesday. RSS3 was traded last week at $2.35 to $2.36 a kg, while STR20 changed hands at $2.22 to $2.23 a kg.
Malaysia’s SMR20 was offered by some dealers in Singapore at $2.24 a kg, down from last week’s traded prices of $2.28 a kg.
The most active rubber contract on Tokyo Commodity Exchange (TOCOM), currently June, hit a low of 246 yen a kg, its weakest since August 2013, on lingering worries about demand from main consumer China.
TOCOM rubber futures, which set the tone for physical prices, ended 9.22 percent lower in 2013 on renewed concerns about demand after rising nearly 15 percent 2012.
Weakness on TOCOM and China’s swelling rubber inventory have weighed on the physical market, giving buyers ample time to look for bargains.
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 5.6 percent week-on-week to their highest since 2004, the exchange said on Friday. SNR-TOTAL-DW
Dealers shrugged off political drama in top rubber producer Thailand, although escalating violence could potentially disrupt commodity trading.
A leader of Thailand’s pro-government “red shirt” movement was shot and wounded in a drive-by shooting on Wednesday in the northeastern town of Udon Thani, in what police said appeared to be a politically motivated attack.
The shooting could further raise tension in the country after Prime Minister Yingluck Shinawatra’s government imposed a state of emergency in the capital, Bangkok, from Wednesday to help contain a protest movement trying to force her from power.