High domestic prices of rubber prompted India, the world's second-largest consumer, to buy cheaper tyre grade from Indonesia, while China showed little buying interest as factories opted for supplies from the country's warehouses, dealers said on Wednesday.
Although China bought a few cargoes of Malaysian tyre grade in overnight deals, the world's largest consumer has turned its back on Thailand and Indonesia, where local dealers were eager to strike deals amid ample supply. "China is as quiet as a church mouse wearing cotton slippers," said a dealer in Singapore who trades Indonesia's SIR20 grade.
Rubber inventories in Shanghai warehouses are near their highest levels since late February, while stocks in the bonded warehouses in Qingdao were estimated at more than 200,000 tonnes. Inventory in Qingdao, which makes up the bulk of the country's rubber stocks, is not disclosed to the public.
Chinese buyers bought Malaysian SMR20 at $3.82 FOB, although deals were also struck at as low as $3.80, including freight. China imported 135,460 tonnes of rubber in January, mainly from Thailand, Malaysia and Indonesia, down 8.1 percent from the same month last year. "China is not chasing the market. The buying is still very selective. Sellers are more keen to sell, especially the Indonesians. People in China buy rubber just to roll over, replenish the stocks," said a dealer in Kuala Lumpur.
"India is pretty much a seasonal buyer. The local price is at a premium, so it makes sense for them to import. It's favourable to import at the moment." India bought Indonesia's SIR20 at $1.69 a pound ($3.72 a kg) FOB for April and May delivery - lower than $3.95 quoted in India.
A few cargoes of unspecified grades were also sold at $3.80 to $3.81, including freight, said dealers. India's natural rubber imports in February jumped 171 percent from a year ago, the state-run Rubber Board said, although a recent rebound in overseas prices may encourage domestic tyre makers to start buying more locally.
India, the world's fourth-biggest producer, imports natural rubber from Thailand, Indonesia, Malaysia and Vietnam. SIR20 was also sold to dealers in Singapore at between $1.70 and $1.71 a pound, but April cargoes were much lower at $1.66, because of ample supply in Indonesia. Thai RSS3 grade changed hands at $3.975 for July shipment.