China, the world's largest rubber consumer, was chasing more cargo from Thailand and Malaysia because of cheaper freight rates, while major tyre makers turned to the Indonesian grade to replenish stocks, dealers said on Wednesday.
Year-end demand was steady even though physical prices had gained due to a recovery on the Tokyo Commodity Exchange, where the most active rubber contract, May 2012, tracked oil and equities higher on hopes for a lasting solution to the debt crisis in Europe.
Thai RSS3 grade changed hands at $3.35 to $3.36 a kg for February shipments in overnight deals, while another Thai grade, STR20, was traded at $3.36 a kg. Last week, the two grades were sold for as little as $3.36 a kg.
There were also a series of deals late on Tuesday for Indonesia's SIR20 tyre and Malaysia's SMR20 at above $3 a kg. The price of SIR20, which used to be the cheapest grade in Southeast Asia, started to surpass Thai rubber in early October after a dry wintering season in the southern part of the main growing island of Sumatra curbed the flow of latex. The northern part of Sumatra is now in the rainy season, which also slows the flow of latex.