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Asia rubber: Quiet with all eyes on INRO, TOCOM

SINGAPORE: Asian rubber trades were in limbo, with all eyes on INRO stocks to be opened for inspection on Wednesday and TOCOM futures that went berserk last week in line with precious metals contracts there, traders said on Monday.

"A lot of buyers are interested (in INRO stocks). They're going to take a view on (its quality)," said a trader. "They should not be bad after all. They can be still used. The only thing is its price."

The International Natural Rubber Organisation (INRO) is to open its warehouses around the world for inspection by potential buyers, with a launch in Port Klang in Malaysia on Wednesday.

Arch Roberts, INRO buffer stock manager, told Reuters last week that it might start selling its stocks soon if prices continued to rise.

INRO, which has a total of 140,000 tonnes, has said it aimed to sell 34,000 tonnes of rubber per quarter if market conditions allowed. The sales must be completed by June 30 next year.

Physical rubber prices have staged a small rebound so far this year, supported by rains that hampered tapping ahead of the start of the wintering in February that usually cuts into raw material supply.

Traders said physical rubber prices were quoted little changed from late last week, but hardly any deals were seen done.

Thai RSS3 was seen at 75-76 U.S. cents per kg for February/March shipments, and 78-80 cents for June. Indonesian SIR20 quoted at 33-33.50 U.S. cents per lb for March shipments.

They said they were also closely watching TOCOM rubber futures, which showed large fluctuations last week triggered by big swings in TOCOM precious metal group (PGM) contracts on Russian supply disruptions.

Traders were sceptical about a report last Tuesday that Thai government rubber stockpile stood at about 60,000 tonnes, down from about 260,000 tonnes last September.

Though this helped support rubber prices last week, it was difficult to imagine that the government managed to dispose of 200,000 tonnes -- nearly 10 percent of its output of 2.23 million tonnes expected this year -- in such a short period, they said.

"China might have bought some, but it could not have been as much as 200,000 tonnes," said another trader. "This raises a question about the credibility of such data."

In January, a Thai agriculture ministry official said the country sold about 50,000 tonnes of its rubber stockpile in calendar 1999 and there was about 200,000 tonnes left. -Reuters