Asia Rubber-Thai, Indonesian grades sold; China chases nearby


* SIR20 traded at above $2.90, Bridgestone buys RSS3

* Rains disrupt tapping in Thailand, Malaysia

By Lewa Pardomuan

SINGAPORE, June 22 (Reuters) - Some quantities of Indonesian rubber changed hands for nearby shipments as China replenished stocks, but high prices blamed on heavy rains curbed demand for Thai grades, dealers said on Tuesday.

SIR20 was traded late on Monday at 132.00 and 133.25 U.S. cents per pound ($2.91 and $2.94 a kg) for July and August delivery free on board Belawan and Surabaya. The cargo was sold to Singapore dealers, who normally ship rubber to China.

"We saw several deals last night and China has also entered the market. Major tyre makers are buying rubber and some of them are looking for shipments as far as December 2010," said a dealer in Sumatra, Indonesia's main growing island for rubber.

Inventories in China, the world's largest consumer, have been in decline since early this year as local tyre makers turned to domestic supply after physical prices in Southeast Asia rallied to a record of around $4 kg in April before correcting.

China's natural rubber imports dropped more than 30 percent to 92,702 tonnes in May from the same month in 2009.

However, as the country's passenger car sales remained strong, traders are hoping China will step up rubber purchases in the coming weeks. [ID:nTOE65H04S]

China's move to allow a greater flexibility in its foreign exchange rate also boosted sentiment in the physical market, although enthusiasm about potential yuan appreciation had somewhat subsided. [nSGE65L00R] [ID:nSGE65L06W]

Deliverable rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 8 percent to 16,441 tonnes last week from a week earlier.

China mainly buys rubber from Thailand, Indonesia and Malaysia, which account for 70 percent of global output.

"China is mostly looking for SIR because the price is still below $3. The Chinese buyers can't pay up for RSS3. Only Bridgestone can pay up," said a dealer in Thailand's southern city of Hat Yai.

But Bridgestone Corp , which is Japan's largest maker of tyres, was only looking for August and September delivery, whose prices were cheaper than those of the front month, he added.

The price of Thai grade RSS3 was steady at $3.60 a kg for July shipment despite declines in Tokyo futures after rains disrupted tapping. The August cargo was quoted cheaper at $3.40, reflecting the Tokyo market where forward months are at a discount to front-month.

Dealers said Bridgestone bought some quantities of RSS3 at $3.40 a kg for August via trading houses in Singapore, while French tyre maker Michelin was chasing SIR20.

For details on physical prices in Southeast Asia, click [ID:nSGE65L02C] (Editing by Himani Sarkar)



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