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BANGKOK, Oct 18 (Reuters): Natural rubber prices are expected to maintain an upward trend, helped by low stocks in Japan and tight supply in producing countries, as overseas demand remains strong.
Very few deals have been done this week, as exporters prefer holding their stocks than lowering their prices, dealers said.
On Tuesday, offers to sell Thai RSS3 rubber sheet for shipment in November held steady from Monday at $1.72, free on board. But overseas buyers were bidding at $1.70.
Traders said they were keeping a close eye on Japan after its stocks fell 3.4 per cent to 7,874 tonnes as of Oct. 10 from 8,149 tonnes on Sep. 30.
The latest data, released by the Rubber Trade Association of Japan Tuesday, showed that domestic stocks are still near record low levels, having only recovered about 10.8 per cent from an all-time low of 7,106 tonnes marked on Aug. 10.
In Tokyo, which sets the tone for global rubber prices, the benchmark March 2006 rubber contract on the Tokyo Commodity Exchange continued to trade at around 204 yen Tuesday.
The tight demand and supply situation has fueled a bull run in Tokyo rubber futures, propelling the key contract to above 200 yen per kg for the first time in 17 years, earlier this month.
Malaysia's tyre-grade SMR20 rubber was steady $1.68 a kg for shipment in November. Indonesia's rubber stood at $1.63-1.64.
Overseas buyers, including Chinese and Europeans were checking prices, waiting for the price to drop before buying.
In Thailand, the world's top producer and exporter of rubber, less supply was expect to arrive onto the market because the rainy season in the south began this month, Thai dealers said.
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