UPDATE 1-Tyre makers buy Indonesia rubber at record,RSS3 sold

* Tyre makers chase SIR20 for March at $5.29/kg

* Thai RSS3, SMR20 also traded at all time high

(Adds quotes, details)

By Lewa Pardomuan

SINGAPORE, Jan 14 (Reuters ) – Major tyre makers purchased
Indonesian rubber at record prices above $5 a kg for March
shipment, while top consumer China was also in the market to
stock up on fears that prices would rise further, dealers said
on Friday.

Physical prices have hit a series of historic high since
October after heavy rains cut supply in main producers
Thailand, Indonesia and Malaysia. Rallies in Tokyo and
Shanghai rubber futures to record highs also helped lift
prices in the physical market.

Bridgestone Corp , Michelin and Goodyear
Tire & Rubber bought SIR20 at 239.50 U.S. cents a pound
to 240 U.S. cents ($5.28 to $5.29 a kg) for March delivery.
There were no details on the amount.

“The market is getting even crazier. We keep hitting new
record every day,” said a dealer in Indonesia’s main producing
island of Sumatra.

February SIR20 was also sold to unspecified buyers at 240
U.S. cents a pound. Thai RSS3, the most expensive grade in
Southeast Asia, changed hands at $5.42 to $5.44 a kg, while
Malaysia’s SMR20 was traded at $5.31.

“China has been buying from time to time. They have
complained that the price is too high, but they still need to
buy,” said a dealer in Singapore, who trades Indonesia and
Malaysian grade. “We’ve seen demand from everywhere. Not only
from China.”

Car sales in China rose 33.2 percent in 2010, securing the
country’s position as the world’s biggest auto market for a
second straight year, official data showed. [ID:nTOE70B06A]

A total of 13.8 million sedans, sport utility vehicles and
multi-purpose vehicles were shipped to dealers last year, the
China Association of Automobile Manufacturers (CAAM) said.

China imported 1.679 million tonnes of natural rubber in
January to November 2010, an increase of 9.89 percent from the
same period in 2009, according to customs data.

A combination of heavy rains and dry weather in Thailand,
Indonesia and Malaysia, has hit production of tyre-grade
rubber, forcing processors to fight over raw material as tyre
makers chased nearby cargo.

The three countries account for around 70 percent of
global natural rubber output.

The tight natural rubber supply situation in the world
market “is likely to be aggravated further” in February-May
2011 as it is seasonally the lean period for tapping,
according to the Association of Natural Rubber Producing

(Reporting by Lewa Pardomuan; Editing by Manash Goswami)