Japan's most active rubber futures contract rose more than 1 percent on Wednesday after a weaker yen and firm crude oil prices spurred buying from speculators. But the physical sector lacked activity because of a public holiday in key commodities trading city of Singapore, where dealers buy rubber from main producers Thailand, Indonesia and Malaysia.
The benchmark January 2007 contract on the Tokyo Commodity Exchange, which sets trends for global rubber prices, hit a high of 268.6 yen ($2.32) a kg before ending at 265 yen, up 1.2 yen from previous close.
The contract had fallen to its lowest level in two weeks at 262.2 yen on Tuesday, mainly because sentiment turned sour after rains subsided in Thailand and Malaysia and helped improve supplies of raw material.
"Wintering is in full swing in Sumatra but I don't think shippers complain too much about raw material. Many sellers don't want to sell rubber in large quantity because the price is so volatile these days," said a dealer in Jakarta. Wintering in Indonesia, when rubber trees shed their leaves and latex output declines, was expected to last through the end of September.
Tyre-grade SIR20 was offered at 98.50 US cents per lb ($2.17 a kg) for September/October shipment, up from 97 to 98 cents on Tuesday. Dealers noted overnight deals at 98.25 cents free-on-board at Belawan port in North Sumatra for September shipment. October rubber was sold at 98.00 cents FOB at Palembang port in South Sumatra. September SIR20 was also traded at 97.75 cents FOB at Belawan and Palembang ports and at 97.625 cents in the United States.
In Thailand, Thai benchmark RSS3 rubber sheet for October shipment was unchanged at $2.25 a kg, free-on-board. Offers for tyre-grade Standard Thai Rubber, or STR20 block, for October shipment were also unchanged at $2.25 a kg. "There were deals around these levels but they are not many.