Japanese rubber futures fell in trade on Wednesday to the key support of 210.0 yen with physical demand thin and poor sentiment towards futures prices. But traders said they did not expect that support level to hold.
The benchmark April contract on Tokyo Commodities Exchange was down 3.2 yen at 211.8 yen ($1.80) per kg on sales by speculators expecting prices to fall further.
"Rubber sentiment was very poor," a Japanese trader said. "Sentiment is very poor and I think there could be some stop-loss selling at around 210.0 yen which could knock the prices down to around 200.0 yen," another dealer in Tokyo said.
Physical rubber prices also fell in line with TOCOM, as demand was thin in the absence of interest from China, the world biggest rubber buyer.
"Supply is rising gradually while stocks are growing, so some traders may have to rush to sell," an Indonesian trader said. "SIR20 could drop lower as we offered at $0.78 per pound but no one bought it," he added.
Prices of several tyre-grade rubbers were expected to fall further over the next few days as rain in Thailand had stopped and tapping was picking up, a trader in Thailand's Hat Yai rubber centre said.
"Right now, we are already under pressure of rising stocks, so I think offers for Thai RSS3 could drop below $1.70 per kg if TOCOM extends its losses," he said.
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