Rubber prices in Southeast Asia were steady on Friday in line with a firmer tone in Tokyo rubber futures, but the physical market was subdued as buyers remained on the sidelines waiting for lower prices.
Rubber futures at the Tokyo Commodity Exchange, which sets the trends for the regional physical market were mostly steady supported by fund buying. The benchmark six-month TOCOM rubber contract October closed 1.8 yen a kg higher at 254.9 yen a kg ($2.23 a kg), after trading between 250.4 yen and 255.0 yen.
The other five contracts were also steady, ending between 0.1 yen and 1.2 yen a kg higher. "The overseas funds were rolling over their positions, selling September and buying October. That sustained the market a little bit," said a dealer in Tokyo. Fundamentals remained unchanged supported by tight supply in rubber-producing countries Thailand and Indonesia during wintering, when trees shed leaves and output falls. "I heard wintering in Thailand is over, but I don't see supply picking up," said the Tokyo dealer.
The physical market had been quiet over the week as buyers were on the sidelines waiting for prices to fall. A stronger baht against the US dollar put pressure on trade for Thai rubber. Offers for benchmark Thai RSS3 rubber sheet rose $0.01 to $2.18 a kg, free on board, for June shipment. Offers for tyre-grade Standard Thai Rubber, or STR20 block, for June shipment rose $0.01 to $2.05. "The baht is very strong. Too strong for the export business," said a Thai trader in the southern town of Hat Yai.
Exporters were offering Thai 60-percent concentrated latex at $1,600 a tonne, free on board, in drum for June shipment. Indonesia's tyre-grade SIR20 was offered between 87.75-88 US cents a pound ($1.93-$1.94 a kg) for June shipment, FOB Begawan in North Sumatra.
"There's an offer for 87.5 cents a pound overnight for June, but we haven't heard any deals so far," said a trader in Jakarta.
Malaysia's SMR20 block rubber was at $1.97, steady from Thursday. At the Shanghai Futures Exchange, the most active July contract rose 160 yuan to 21,605 yuan.
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