Tokyo rubber futures reverse gains

Japanese rubber futures were mostly weaker on Wednesday, erasing some of the previous day's gains, after a slide in other commodities such as gold and base metals sparked liquidation.
The declines in Tokyo put pressure on the price of tyre-grade in Southeast Asia but tight supplies in Thailand and Indonesia as well as talks of purchases by China offered support, said dealers.
The benchmark September contract on the Tokyo Commodity Exchange fell 3.3 yen per kg to close as at 261.2 yen ($2.21). The contract rose more than 1 percent on Tuesday as a surging oil price ignited fund buying.
"The market is trying to go up but it doesn't have the strength.
It's just the failure to sustain gains," said a dealer in Tokyo.
But dealers said the mood was bullish because of strong oil prices and tight supply in Southeast Asia during the so-called wintering season, when rubber trees shed their leaves and yields are low.
Dealers noted overnight sales of Indonesia's tyre-grade SIR20 at 87.75 to 88.00 US cents per pound ($1.93 to $1.94 a kg) free on board at the Belawan port in North Sumatra, Palembang port in South Sumatra, and Surabaya port in East Java.
The rubber was for June shipment and sold to dealers in Singapore, who normally ship the commodity to China.
"Buyers are keen to buy SIR20 at 87.50 but I haven't heard any deals today. Singapore dealers are active but I don't see any signs of buying interest from Europe or the US," said a dealer in Padang, the provincial capital of West Sumatra.
Dealers said China needs to replenish stock after being absent from the market for sometime, waiting for the price to come down.
Rubber stocks monitored by the Shanghai Futures Exchange fell 3,980 tonnes to 39,915 tonnes in the week ended Thursday, April 6.
"There's a shortage of raw material in Medan area, that's why they are not so keen to sell," said a dealer in Jakarta, referring to plantations near the provincial capital of North Sumatra.
In neighbouring Thailand, Thai benchmark RSS3 rubber sheet for May shipment was little changed at $2.15 a kg, free on board, while STR20 block was also flat at $2.03 to $2.04.
Malaysia's tyre-grade SMR20 fell to $1.95 from $1.97 on Tuesday.
In Shanghai, the most active July rubber contract rose 290 yuan per tonne to 21,260 yuan per ($2,654).