Asian rubber prices were unchanged on Tuesday in thin trade due to holidays in Singapore and Malaysia, but traders saw some support as Tokyo futures recovered from a sharp fall.
"People have been waiting for a rebound as the market appeared to have been oversold," said a dealer in Thailand's southern town of Hat Yai.
"But in the medium term, the market is still on a down trend."
In Japan, the benchmark April 2006 rubber contract on the Tokyo Commodity Exchange rose 1.6 yen per kg to 190.5 yen, having traded between 186.7 and 191.4 yen.
Offers for Thai Ribbed Smoked Sheet No 3, or RSS3, were unchanged from Monday at $1.65 a kg for December and January shipment, he said. Offers for tyre-grade Standard Thai Rubber, or STR20 block, for December and January shipment were also barely changed at around $1.65 a kg.
Physical business for Thai rubber was subdued due to a public holiday in Singapore where most buyers are located, the dealer added.
The rainy season in Thailand, the world's top rubber producer and exporter, is expected by traders to end soon, putting downward pressure on prices as supplies increase.
A trading house in Tokyo said TOCOM futures were supported by the rebound from Monday, assisted by the yen hitting a two-year low against the dollar.
"We saw some short-covering in TOCOM today, but TOCOM futures were still far lower than physical offer prices," said a trader at a futures brokerage firm in Tokyo.
December TOCOM rubber futures had closed on Monday at a discount of 14.3 yen per kg to imported physical prices, he said. The normal discount is only around 5.0-6.0 yen.
The key TOCOM contract jumped this month to more than 200 yen per kg for the first time in 17 years supported by low domestic inventory levels and tight supplies from major producers.
The Malaysian rubber market will also close on Thursday while most rubber traders in Indonesia have already left their office for a weeklong Islamic celebration Eid-ul-Fitr from Wednesday.
On Monday, Malaysia's tyre-grade SMR20 was at around $1.62 a kg for January shipment, while the price of Indonesian tyre-grade SIR20 for December was at about $1.60 a kg, free on board.