China is likely to turn to its own rubber inventory which is being offered at discounted prices, dashing hopes the world's largest consumer will return to the physical market ahead of the Chinese New Year early next month, dealers said Wednesday.
Although Thai, Indonesian and Malaysian tire grades changed hands in a series of overnight deals, they were sold among trading houses only. Other tire makers may look for bargains after price-setting Tokyo futures slipped from 9-month highs.
"As far as I know, China hasn't come in to buy. They normally want prompt shipment, which means they don't want the cargo to arrive when they are away on holiday. Shipments to China take from 12 to 15 days," said a dealer in Kuala Lumpur. "I don't think they are buying now. If they need rubber urgently, they can buy it from warehouses. Ex-warehouse rubber in China can be as much as $50 per ton cheaper if you include freight."
Rubber inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.8 percent to 101,482 tons last week, their highest in more than two years.
