More Thai sellers offered rubber for nearby shipments because of ample supply that cut prices and stirred fears of defaults by Chinese buyers, while Indonesia was struggling to secure raw material, dealers said on Tuesday.
A few cargoes of Thai RSS3 and STR20 rubber changed hands at around $3 a kg in overnight deals, but the Thai market was still gripped by worries about defaults after Chinese buyers asked for delays in several shipments.
"I have no doubt defaults have taken place. I mean, why are Thai people still selling rubber for nearby shipment while most people are already selling forward?" asked a dealer in Kuala Lumpur, who trades Thai and Malaysian grades. "They are desperate."
RSS3 was traded at $3.35 and $3.40 for November/December delivery late on Monday, while STR20 was sold to unspecified buyers at $3.35 and $3.37 a kg. RSS3 was offered at $3.40 on Tuesday, but the price has plunged more than 40 percent since hitting a record at $6.40 in February on concerns the debt crisis in Europe could curb auto demand and fears of slowing imports from top consumer China.
Dealers turned their attention to a meeting in Bangkok later this week, when Thailand, Indonesia and Malaysia plan to discuss ways to halt a decline in physical prices, which was also spurred by selling on Tokyo Commodity Exchange. Tokyo rubber futures, which set the tone for physical prices, edged down on Tuesday after rising 7 percent in the previous session on hopes the three countries would come up with steps to support prices.
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