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Asia Rubber-Thai stocks, INRO weigh on market

SINGAPORE: Asian rubber prices are likely to fall further, as many Thai suppliers are seen as keen to dispose of stocks and INRO is expected to test the water despite a tender cancellation last week, traders said on Monday.

"There seems to be too many parcels. INRO also hurts," said one trader, referring to Thailand.

"One seller tempted others into selling, yet there are few buyers. Prices may go down a bit further." Led by falls in TOCOM futures prices, in part due to heavy Japanese crude rubber stocks, physical rubber prices have been under strong downward pressure since last week, traders said.

They said active sales by Thai suppliers, who had held back stocks in hopes of higher prices amid wintering, had accelerated the price decline, with now seen at 67 US cents per kg for May delivery, down from around 73 cents a week ago. Indonesian showed some resilience, quoted at 31 US cents or slightly lower for April/May shipment, down from around 33 cents a week ago, as it had not rallied as much as its Thai rivals during the first months of this year, traders said.

They said the market was also weighed down by the stocks of the International Natural Rubber Organisation (INRO), although it opted not to sell at a tender last week due to low bids. "They're exercising. trying to get an idea on what kind of discounts they have to offer for selling rubber," said a trader.

A third trader agreed, adding: "It's there, waiting to sell."

INRO buffer stock manager Arch Roberts told Reuters last week it was unlikely to seek fresh bids before inspection of its warehouses in Bangkok on March 9.

It is to open warehouse in Medan on March 14.

"We're planning to go to Indonesia (to inspect INRO stocks)," said a trader at one of the major dealers.

"We want to see who's coming and who's interested...unless China starts buying it, I can't imagine many would take it."-Reuters