Prices of tyre grade rubber sheet slid in Asia on Friday, dragged down by increasing supply in producing countries and a sluggish Tokyo Commodities Exchange. Offer prices in rubber-producing countries fell $1-2 a kg towards $1.70 with few buyers in the market and as sellers sat on large stocks, they said.
"Chinese buyers are in the market and they don't care what the offers are. They just want to buy at the level that they want," a trader in Thailand's Hat Yai rubber centre said.
Physical rubber prices were expected to fall further next week along with TOCOM prices, which tumbled to six-week low on Thursday on technical selling to 213.0 yen ($1.82) per kg. The market was closed on Friday for a national holiday.
Dealers expected TOCOM prices to drop next week towards a key support of 200.0 yen due to rising supply and a lack of technical support from other commodity futures.
On the physical side, traders said they expected prices of RSS3 to fall further next week, in line with TOCOM's bearish mood, to $1.69-1.70 per kg, as dry weather allowed more tapping. "If TOCOM could stay somewhere above 200.0 yen per kg, RSS3 should not drop lower than $1.70 a kg." a trader in Thailand said. Offers for standard block rubber in Malaysia and Indonesia also dropped slightly as buyers were in no rush to buy, an Indonesian trader said.
In Thailand, the world's biggest rubber producer, farmers in the three rebellious, southernmost provinces of Pattern, Yale and Narathiwat are tapping earlier as daily attacks subside.
More than 1,700 people have been killed since January 2004. Tapers have been among the targets of the violence, causing some to avoid going to work in plantations while it is still dark. "Farmers have begun to go tapping around 4 o'clock rather than 6-8 o'clock after they witnessed fewer attacks compared with several months ago," a farmer in the region said.
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