By Sambit Mohanty
SINGAPORE, July 24 (Reuters) - Southeast Asian rubber prices may ease further in coming weeks as exporters struggle to find buyers in the United States and China, but Japan's appetite for nearby cargoes offers a ray of hope, traders said on Wednesday.
Traders did not expect support from a pact due to be signed later this month between the world's three biggest rubber producers. They also said there was market talk that the U.S. government might sell some stocks.
"There is a lot of downward pressure on the market," said one Singapore trader. "A lot of rubber is floating around, but the demand situation is not all that great."
Traders said benchmark tyre-grade SIR20 rubber, which traded at around 36 U.S. cents a lb last week, was expected to trade below 35 cents in the coming days. RSS3 sheet rubber could fall below 75 U.S. cents a kg from 82 cents last week.
"I have a strong feeling that the market will retrace itself to somewhere between 70 and 75 (U.S. cents a kg for RSS3) before it can go up again," said one trader.
Traders said the recent sale of 130,000 tonnes from the government stockpile in Thailand, the world's biggest producer, in addition to some private sales, had largely satisfied China's appetite for nearby shipments.
"China has booked quite a bit from Thailand recently and I don't see them buying a lot in the days ahead," said another Singapore trader. "But some Japanese buyers are keen on a few nearby shipments although the volumes are not all that big."
Earlier this week, the Rubber Trade Association of Japan said crude rubber stocks at private Japanese warehouses totalled 15,997 tonnes as of July 10, the lowest since February 1966, when stocks stood at 12,464 tonnes.
TALK OF U.S. SALES
Regional traders said the U.S. government might sell about 78,000 tonnes of rubber from its stockpile and that was probably keeping U.S. buyers of rubber from Southeast Asia at bay.
"We are hearing that the bidding for that rubber will start on August 19. U.S. buyers will probably try to stay away from imports and see if they can strike deals for that rubber at good prices," said one Asian trader.
Another trader added: "Exporters here are closely watching a possible U.S. sale, although I am not sure what the quality of the U.S. stockpile is."
Thailand, Indonesia and Malaysia, which together produce some 80 percent of the world's natural rubber, are likely to sign a pact later this month to establish a consortium to regulate sales and stocks in the three nations.
Although Indonesia has voiced concern that the recent Thai government sales violated an agreement by the three nations to cut exports, Thailand denied the accusation, saying they were still under their annual export ceiling of 1.9 million tonnes.
"This pact has been long discounted in the market," said one trader. "They have been talking about this for a long time. Unless some genuine actions are taken, I don't think the market will react in any way."
Thailand's decision to sell its entire stockpile of 130,000 tonnes took the Southeast Asian market by surprise, with the government having said many times in recent weeks that it had no plans to sell its stocks.
"With so many confusing signals for the market following the Thai sale, I wonder what the pact can do for the market and prices," said one trader.
Traders added that the rubber supply situation from Indonesia was tight due to dry weather, while supplies from Thailand and Malaysia were relatively better.
"According to my sources in Indonesia, supply from the Medan side is pretty tight. The Palembang side is moving into wintering," said one trader. "But it's not a big cause for worry."