Major tire 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% in 2010, securing the country's position as the world's biggest auto market for a second straight year, official data showed.

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 tons of natural rubber in January to November 2010, an increase of 9.89% 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 tire-grade rubber, forcing processors to fight over raw material as tire makers chased nearby cargo.

The three countries account for around 70% 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 Countries.