Rubber demand likely to slow down

Print this page Posted on : 02-25-2009 by recycleinme.com

Rubber demand is likely to slow in March, with recent big buyer China pulling back from the market, but prices may still rise because of the normal seasonal drop in supply, traders said on Tuesday. Chinese buyers were believed to have bought plenty of rubber in February, mostly from Indonesia. ''Buyers signed a lot of deals in February. We'll see a lot of rubber arrive at China's ports in March,'' said a trader in Shandong. ''But Chinese buyers are likely to put out fewer orders in March.'' The poor outlook for the tyre industry, which consumes around 60 per cent of world natural rubber output, continued to hang over the market, persuading would-be buyers to hold back in anticipation of price falls. ''Overall demand from China and the US has disappeared, adding to the pressures on prices,'' a trader in Jakarta said. But prices could tick up in March, when Thailand and Malaysia, the biggest and the third biggest producers, are in their dry season and rubber latex output falls. Those buyers still in the market were taking up small lots from Indonesia due to its low prices.

Source : Business Line