Rubber stored in US as a market steadier
In a move that may serve as a buffer against falling prices, Asian rubber is being stockpiled in the United States.
The Port of Butte expects to receive about 10,000 tons of natural rubber over the next three months for storage in its industrial-park warehouses.
(Butte's port receives shipments by rail directly from other ports on the West Coast, processes them through a full-time US Customs office, and sends them on to destinations throughout the country.)
Port manager Richard Monaghan says he believes the shipments will be the largest inland shipment of rubber in US history.
The rubber is being shipped to Butte through the Port of Tacoma, Wash., one of the two or three major US ports of entry for rubber.
Normally the rubber is shipped for delivery to tire companies or commodity brokers. This shipment, however, is going to the account of the International Natural Rubber Organization.
INRO is an international commodity group made up of both rubber-producing and -consuming nations. It was sponsored by the United National Conference on Trade and Development to try to stabilize wild flunctuations of commodity prices in third world countries.
The group is designed to serve the interests of both exporting and importing nations. When rubber prices are high, the manager of the ''buffer stock'' is instructed to sell; when prices fall, he is instructed to buy rubber.
In recent months there has been a sharp drop in demand for rubber because of the deepening recession in the auto industry. The drop is so severe that natural rubber is cheaper then synthetic rubber.
Since late last year the buffer-stock manager has been buying heavily, and by March had accumulated a stock of about 100,000 tons.
In the past two months members of INRO have been arguing among themselves over the intervention price, that is, the price at which the buffer-stock manager is supposed to buy rubber.
Malaysian producers, hard hit by rising production costs and falling prices, want to raise the price, while consumer nations, including the US, want to lower the price.
At the last meeting of INRO in Kuala Lumpur, the consumer side prevailed, resulting in a slight reduction in the intervention price. The price of rubber now hovers just around the level at which the buffer manager may or may not buy.