Lean demand hurt prices for tyre-grade rubber in Asia this week, with the market failing to get a boost from top exporter Thailand's move to unload more than 200,000 tonnes in stockpiles, traders said.
China's Hainan Rubber Industry Group last week agreed to buy 208,000 tonnes of rubber from Thailand. But that did not lift sentiment in a market that has struggled with slower demand from No. 1 buyer China, keeping global benchmark prices not far off five-year lows reached in October.
Bridgestone bought Indonesian grade SIR20 at 67.25 cents per pound ($1.48 per kilogram) for February delivery, said a Jakarta-based trader, down from 69.75 cents last week.
The top tyre maker bought SIR20 for March shipment at 67.75 cents per pound, the trader said, adding the sales were made by dealers because Indonesian producers still find it tough to sell at current prices.
"Indonesian producers can only sell at $1.55-$1.57 per kg. But the dealers are selling what they can now because they think the market will go even lower," he said.
Weak prices have forced many Indonesian farmers to abandon tapping to try other jobs, leading to raw material shortfall.
Thai grade RSS3 for February was sold at $1.54 per kg and at $1.55 for March, the Indonesian trader said, against above $1.60 in the past two weeks.
In Thailand, RSS3 was sold at $1.55-$1.59 per kg, while STR20 changed hands at $1.45-$1.53, said a trader from the southern city of Hat Yai. STR20 was offered at $1.54-$1.55 last week.
"As a result of the tightness in Indonesian supply, some customers are turning to Thai grades," he said, adding that traders were seeking more details of the Thai sale.
Thailand's state-run Rubber Estate Organisation sold the rubber, including some top-grade 100 percent rubber priced at around $1,900 per tonne, according to a source from the Thai Ministry of Agriculture. That equates to $1.90 per kg, well above current market rates.
"Prices seem to hover around the 140-160 (US cents per kg) region which is a short-term range and buying interest has slowed down as we move towards the year-end," said a trader in Singapore, citing the range in Sicom futures.
Benchmark Tocom futures have fallen 28 percent this year, hitting a one-month low of 195.30 yen ($1.63) per kg this week.
