Key TOCOM rubber futures inched lower on Tuesday in thin trade as the yen climbed to a three-week high against the dollar, prompting investors to lock in profits, but a falling supply firmly supported the downside. The key Tokyo Commodity Exchange rubber contract for September delivery ended down 0.3 yen at 330.8 yen per kg.
The Chinese market is closed for a three-day holiday and will reopen on Thursday. "Many traders took a wait-and-see stance due to the absence of China's speculative buyers. The market will be locked in a recent range for a while due to a lack of strong market driving factors," said Naoki Asami, chief broker at trading house Kanetsu.
The front-month May rubber contract on the SICOM in Singapore was last traded at 376.20 US cents per kg, down 40 cents. Rubber supply in Thailand and Malaysia, the biggest and the third-biggest producers respectively, is falling due to the wintering-dry season that cuts latex supply. The dry season normally last for a few months and ends by mid-April.