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Asia rubber China buying,rains may trigger rebound

SINGAPORE: Rubber prices are likely to rebound or at least stop declining this week on help from Chinese buying, amid talk of new import quotas and rains that could reduce raw materials supply, traders said on Monday.

"I'm upbeat for the start," said one trader. "In the medium term, looking at the wintering factor, there's a good chance for prices to reach higher. The weather factor could be also crucial...This rain may dampen raw material supply."

Traders said the market was still very quiet, with the new year holidays continuing in the Tokyo rubber futures market as well as in Thailand, the world's largest rubber producer.

But Chinese importers have sought nearby shipments since late last year, reviving rumours that Beijing might have issued -- or was going to issue -- new import quotas of some 70,000 tonnes. China is a regular buyer so the latest purchases were not seen as outstanding, but the buying could prompt a recovery after recent falls on large Japanese inventories, they said. Referring to TOCOM, a second trader said: "I doubt prices will go down very much further. We are already very close to last year's lows. This Chinese buying may trigger a turnaround." The first trader said TOCOM might receive support from a report last Tuesday that Japanese crude rubber stocks at private warehouses stood at 43,152 tonnes as of December 20, down from 44,103 tonnes on December 10.

Traders said it was still unclear how recent rains had affected tapping in rubber producing regions, but it could tighten raw materials supply again ahead of the wintering season in February and March.

Over the past few weeks, many countries in the region, including major rubber producers such as Thailand, Malaysia and Indonesia, have been drenched by the La Nina weather pattern, adding to rains from the usual northeast monsoon season.-Reuters