Tokyo rubber futures rebound

Tokyo rubber futures rebounded on Monday as players took speculative buying positions after recent falls, backed by concerns about limited supply in Thailand, traders said.
The benchmark distant November TOCOM rubber contract closed at 295.8 yen ($2.57) per kg, up 8 yen from Friday's 289.8 yen. "Rubber futures fell in line with other commodities to the level at which players thought they should buy," a dealer in Tokyo said.
Prices were expected to rise a little further on Tuesday to test strong resistance at 300.10 yen, the level that could spur profit taking, dealers said. "I think prices could go up again as players are worried about limited supply in Thailand," a trader said.
On the physical front, unusual rains returned to Thailand, the world biggest rubber producer and exporter, disrupting tapping. Traders in Thailand's Hat Yai physical market said there was heavy rain in several provinces of southern Thailand, which produces up to 90 percent of the country's output.
"Supply is still very bad because there was rain in the past three or four days," a trader in Hat Yai.
"If it goes on raining like this, I don't think prices can go down, another trader in Thailand said.
Thai unsmoked sheet (USS), the raw material for export-grade rubber sheet, was at 96.00 baht ($2.50) per kg, up from Friday's 95.68 baht as less supply came onto the market.
Offers for Thai benchmark RSS3 rubber sheet were at $2.73 per kg free on board for August shipment, up from last week's $2.70. Some exporters were reluctant to commit to forward deals, as many needed to delay shipments because they could not buy Thai rubber to fill orders at current prices, traders said.
"Some of them who sold forward have had to delay shipment or face default because they don't want to lose money and they could not buy at these high prices," a trader said.
Offers by other rubber exporters stayed firm in line with TOCOM and Thai physical prices. Indonesian tyre grade SIR20 was offered at $2.23 per kg, free on board, up from last week's $2.20.
On the Shanghai futures exchange, the most active September rubber contract settled at 24,185 yuan ($3,023) a tonne, down from 24,680 yuan on Friday.