Tokyo rubber futures fell on Friday due to technical factors that further pressured rubber prices in producing countries, dealers said. The key most distant December TOCOM rubber contract on the Tokyo Commodity Exchange, which sets trends for the global rubber price, closed at 283.9 yen per kg, down 4.4 yen from Thursday's close.
It had moved in a range of 282.6 to 290.6 yen. "Even though other commodities are up, rubber failed to go up. This was due to technical selling and cut-loss selling," one Japanese broker said. The other five contracts were down between 2.7 yen per kg and 4.4 yen per kg.
The negative sentiment was underscored by falling raw material prices as the market expected the tight supply situation to ease in the near term. "Supply in Thailand is getting better and better and raw material prices have been falling," another Japanese trader said. Japanese dealers said the market could continue its downward trend and move between 270 yen and 280 yen a kg in the next week.
"If other commodities go down, I think rubber will surely fall further," said one dealer. TOCOM will be closed on Monday for a holiday. In the physical market, rubber prices in Thailand, Indonesia and Malaysia slumped as overseas buyers hugged the sidelines. "There are no buyers at the moment. They are waiting for the price to drop further," said one Thai dealer in the southern town of Hat Yai.
Thai benchmark RSS3 rubber sheet for August shipment was down $0.15 at $2.50 a kg, free-on-board on Friday. "Overseas buyers are quiet. They watch TOCOM and when the price keeps falling, they don't come in," another dealer said.
Offers for tyre-grade Standard Thai Rubber, or STR20 block, for August shipment were also down $0.05 at $2.45 a kg. Thai 60-percent concentrated latex was offered at $1,790 a tonne free-on-board in drums for August shipment. They were at $1,690 a tonne free-on-board in bulk for August shipment. Indonesia's tyre grade SIR20 was lower $0.07 at $2.30 a kg, FOB, for September shipment.
Malaysian tyre-grade SMR20 was down $0.02 at $2.45 for August shipment.
Thai benchmark unsmoked rubber sheet grade 3, or USS3, the raw material for export-grade rubber, fell 1-2 baht to 88-89 baht a kg ($2.32-$2.35) on Friday from Thursday.