Asian rubber futures mostly settled lower Monday following long liquidation amid negative cues from crude oil and gold, said trade participants.
Trading was thin as Thailand, the world's largest producer, was closed for a public holiday.
However, traders said fundamentals are still strong and physical prices of the USS3 grade raw material in the central markets of Thailand will likely be above THB83 when business resumes Tuesday.
The benchmark May RSS3 contract on the Tokyo Commodity Exchange settled Y1.2 lower at Y261.3 a kilogram after reaching an intraday low of Y257.9/kg. Prices have more than doubled after falling to Y99.8/kg in the first week of December 2008.
Prices again eased during the night session, with the May contract ending at Y259.7/kg. Night session prices aren't included in intraday trading.
"Rubber gained dramatically in last few weeks, not only on its own fundamentals but also on the back of positive leads from gold," so gold's sharp retreat Friday impacted rubber today, said an executive at a Tokyo-based commodities brokerage.
Gold prices fell nearly $50 Friday, setting the stage for a downward correction in rubber prices Monday.
"With rubber prices above Y260/kg, many brokers took profits taking advantage of the recent rally," said an exporter in Singapore.
Traders said leads from the physical market were limited due to a holiday in Thailand and this also prompted long liquidation.
The benchmark March contract on the Shanghai Futures Exchange settled CNY10 lower at CNY22,435 a metric ton.
Japan's natural rubber imports rose 19% in October, probably because of the sharp drawdown of inventories seen in the previous few months.
The country imported an estimated 55,266 tons of natural rubber, up 19% from 46,383 tons in September, according to data issued by the Rubber Trade Association of Japan.
The association didn't give any reason for the increase, but traders said the buying may have been due to the need to rebuild inventories.
The rise in imports was due mainly to higher purchases of the RSS grade, which rose to 15,367 tons in October from 10,823 tons. Most of the RSS grade imports were from Thailand.
Asian physical prices eased slightly amid a lack of buying interest and a fall in the futures markets, traders said.
Buyers are on the sidelines, expecting prices to decline further, said a trader in Singapore.
He said ample supply was available at China's bonded warehouses, where Indonesia's SIR20 can be purchased at $2,770/ton, compared with offers at origin for $2,780/ton.
(Source: irco.biz)
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