950807

Asian rubber prices

set to climb on

China buying

SINGAPORE: Southeast Asian rubber prices, led by Thai and Indonesian origins, are set to climb further this week on expectations of renewed China buying, traders said.

"Prices are likely to rise further this week following news reports of China planning to buy large quantities of rubber," one Indonesian dealer in Medan said.

Indonesian sellers are upbeat after being able to keep the benchmark SIR20 rubber prices above the psychological barrier of 50.00 U.S. cents a pound the whole week, and are seen offering higher at 52.00 cents.

In Thailand traders noted fresh enquiries from China, one of the world's key rubber consumers which had until recently stayed out of the market.

"Chinese enquiries kept coming in, each for a few thousand tonnes, but we didn't hear any actual fresh orders," a trader at Bangkok-based Thaisan Rubber Company said.

He said supply in southern Thailand was steady last week despite heavy rain in some growing provinces.

Thai RSS3 rubber for September delivery firmed to 121 U.S. cents a kg FOB Bangkok/Hatyai on Thursday from 117 the previous Friday.

Traders said prices could firm further this week on sustained demand and outstanding shipment obligations of Thai exporters. But they said most U.S. and European buyers would probably not return until the end of the Northern Hemisphere summer in September.

In Malaysia, prices are likely to stabilise at current levels or move higher as the market expects more enquiries from China and some European factories despite the summer holidays, dealers in Kuala Lumpur said.

They said steady domestic supply and a slower selling pace by producers would help prices.

"The Chinese were quite active in the market this week and we expect them to enquire about more SMR and RSS3 sheet rubber," a dealer at a Kuala Lumpur brokerage house said.

The amount of business will depend largely on the outcome of the Chinese bids, dealers said.

"Some European factories are still open despite the summer break and may ask for nearby shipments," the trader added. "Some producers have been oversold recently. But they will slow down their selling activity."-Reuter