Tyre manufacturers Bridgestone Corp and Sumitomo Rubber Industries bought a few cargoes of Indonesian rubber for nearby shipments, dealers said on Tuesday, but other grades struggled to attract buyers this week.
A drop in benchmark Tokyo rubber futures also prompted some consumers to wait for bargains, although sellers and processors were complaining that tyre grade prices were already below production cost.
“Most buyers are on the sidelines because they know there’s plenty of rubber,” said a dealer in Kuala Lumpur. “There’s no need to rush. I think they are bearish on the market and they want to wait.”
The most active January contract on the Tokyo Commodity Exchange fell to its weakest in more than a week at 204.2 yen a kg as Asian stocks slipped after a survey showed China’s services sector growth fell to a record low.
Bridgestone purchased Indonesia’s SIR20 grade at 77.00 U.S. cents a pound ($1.69 a kg) for September delivery and at 77.25 cents for October in a series of overnight deals. Sumitomo bought SIR20 at $1.71 a kg for November, dealers said.
Last week, the grade changed hands at $1.73 a kg.
The Thai market was sluggish, with STR20 offered at $1.75 including freight to top consumer China. Another grade, RSS3, was offered at $2.03 including freight to China for September delivery, with no reports of deals.
Last week, RSS3 changed hands at $2.01 to $2.03 a kg for September/October without freight but STR20 was unsold.
Tokyo rubber futures, which set the tone for tyre grade prices in Southeast Asia, were under pressure from rising inventory in China and global oversupply. The most active contract has dropped more than 25 percent this year.
Malaysia’s SMR20 was offered at $1.72 a kg but one dealer in Singapore sold the grade at $1.78 a kg for October delivery.