November 8: Southeast Asia's rubber market is likely to stay soft in slow trade this week with supplies ample and demand lacking, regional traders said.There were still concerns over the weather and currencies, but the impact was decreasing, they said.
"Some people are saying supply is tighter in Thailand and Malaysia. There is some truth in it, but I just don't see much help from any news on the market at the moment," said one Singapore trader.
A lack of demand was the main problem, she said.
Recent rains in Southeast Asia brought by La Nina, which is caused by colder-than-usual Pacific Ocean temperatures and often brings heavy rains, have tightened rubber supplies.
"At most I think the market won't fall too much. It may be supported, but the market should be very slow again this week," the trader said.
The Malaysian market was expected to trade in a tight range this week with poor demand seen keeping a lid on prices, traders in Malaysia said.
"Prices may drift slightly lower due to lack ofdemand. We have not been seeing many inquiries," said a local trader.
The market had been extremely quiet over the last week and no signs of improvement were in sight, traders said.
However, concern over tight supply due to rains in key growing areas could limit the market's downside, they said.
"Some producers are holding back stocks on expectation of a tight supply due to rains," said another trader.
At the close of last week, the Malaysian Rubber Board quoted November RSS1 buyer at 279.50 Malaysian cents (73.55 US cents) a kg, down one cent for the week.
November SMR 20 buyer was 228 cents (60 US cents) a kg against 229.50 cents (60.39 US cents) a week earlier.
In Indonesia, traders expected prices to fall this week because of the sustained low demand.
"The trend will remain bearish because of the low demand. "Tyre makers have already stocked up ahead of the Christmas holidays ... I think that's why the market is very quiet," said one trader in Padang, West Sumatra.
December rubber finishedthe week at 27.50 US cents/lbfob Medan, Palembang and Surabaya.
January hovered at 28.50 at the three centres.
December rubber was being offered at 27.25 fob Padang and at 28.25 for January.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.