Asian rubber: Tokyo futures reverse gains

Japan's most active rubber futures contract ended lower in volatile trade on Friday as speculators booked profits after the price had risen more than 2 percent the previous day.
Benchmark January 2007 contract on the Tokyo Commodity Exchange, which sets trends for global rubber prices hit a high of 270.2 yen per kg ($2.34) before closing at 266.5 yen, down 4.3 yen from previous close. The contract had risen to 271.1 yen per kg on Thursday as it tracked a rally in Japanese gold futures. Physical dealers said major tyre-makers Michelin, Bridgestone Corp and Goodyear Tire and Rubber Co bought Indonesia's tyre-grade late on Thursday but main buyer China was on the sidelines.
SIR20 was traded at 99.50 US cents per lb ($2.19 a kg) free on board at the ports of Begawan, Plumbing and Surabaya for September shipment. October rubber was done at 99.75 and 100 US cents, and November rubber was sold at 100 and 100.25 cents. "It was kind of busy in Singapore last night. I don't see much interest from China but tyre-makers were active buyers," said a dealer in Pekanbaru, provincial capital of Rio in Sumatra.
"People are offering rubber at 100 cents for October and 100.25 cents for November but buyers only show interest at 99.50 cents," he said. Thai dealers said tyre-grade Standard Thai Rubber, or STR20 block, for October was traded overnight at $2.27 and $2.28 a kg but there were no details on the buyers.
"Supply of raw materials continue to improve and that puts pressure on the market. We may try to break the support level of 260 yen," said a dealer in Thailand's southern city of Hat Yai, referring to the Japanese futures.
Tokyo's key distant contract rallied to 324.5 yen, the highest for a benchmark since September 1980, on June 13 after worries about tight domestic stocks in Japan and unusually wet weather in main producer Thailand sparked speculative buying. But a technical correction soon kicked in, and speculators also ditched their positions as supplies gradually improved in Southeast Asia. Thailand's STIR20 and benchmark RSS3 rubber sheet for October tracked declines in Japanese futures and was quoted at $2.27 a kg, down from $2.30.
Malaysian tyre-grade SMR20 also fell to $2.27 a kg from $2.30 a kg. In Shanghai, the most heavily traded October rubber contract fell 335 yuan per tonne to end at 22,960 yuan per tonne ($2,879).