Asia Rubber Futures Settle Down; Trade Thin On Tocom Closure

    SINGAPORE (Dow Jones)--Asian rubber futures settled lower in very thin trade  Monday, with the closure of the bellwether Tokyo Commodity Exchange for a public  holiday in Japan damping interest elsewhere, said market observers. Trading on Tocom and the Central Japan Commodity Exchange resumes Tuesday. The International Rubber Consortium said Monday it will discuss the recent slump in rubber prices and possible intervention measures to try and stabilize  the market when it meets in Bangkok Thursday and Friday, IRCo said in a statement  Monday. 

    IRCo represents the world's three biggest rubber producing countries -  Thailand, Indonesia and Malaysia - and has a mandate to ensure natural rubber  prices are remunerative to smallholders. 

    An IRCo official declined to comment on what measures would be discussed, but  industry participants said limiting exports from the three member countries is  one option open to the organization. 

    Malaysia's Minister for Plantation Industries, Peter Chin, said Malaysia will  try to prevent a sharp fall in natural rubber prices by coordinating supplies  with other members of the tripartite group of producers. 

    "We will have talks with Indonesia and Thailand for proper stock management,  supply management and export tonnage," Chin said on the sidelines of an  international conference on rubber. 

    On the Shanghai Futures Exchange, rubber futures settled sharply lower, with  most contracts ending the day at the exchange-imposed 6% lower daily limit,  though the benchmark January 2009 contract rebounded slightly off the intraday  low. 

    "Market participants intentionally avoided another limit-down session, which  would trigger trade suspension tomorrow, followed by forced liquidation, which  does no good to both buyers and sellers," said Zhang Yong, an analyst at Nanhua  Futures. 

    SHFE rubber has to fall to around CNY10,000 to fully match up with losses in  Tocom rubber in the past two weeks, so the possibility of the market hitting  limit-down again tomorrow cant be ruled out, Zhang said. 

    The benchmark January 2009 contract settled down CNY775 at CNY14,600/ton.      On Sicom, rubber settled mostly lower in very thin trade, with the closure of  Tocom damping interest, said a trader in Singapore. 

    RSS3 futures on the Agricultural Futures Exchange of Thailand also settled  sharply down, again in very thin trade, with just 17 lots exchanged.   Another steep fall on the SHFE encouraged another round of liquidation, while  Tocom's closure damped trade. Further losses are now expected, though the focus  will now turn to Tocom tomorrow, said a trader in Bangkok. 

    Asian cash rubber prices were also lower in thin volume with very few trades  reported, again with traders citing Tocom's closure for damping interest, said  traders. 

    Buyers are reluctant due to expectations that prices will ease further still  in the coming days, while processors also are not keen to sell at current prices,  said a trader in Singapore. 

    The recent slump in prices has led to an increase in deferments on shipments  by buyers, though most contracts have been settled by re-negotiation, he said. 

Asian Rubber Futures 

                      Oct 13               Change from 

                                           Oct 10 Close 

Tocom    Mar  RSS3    Market Closed        - 

C-Com    Mar  RSS3    Market Closed        - 

Shanghai Jan  SCR5    CNY14,600/ton        Dn CNY775 

Thai     May  RSS3    THB63.75/kg          Dn THB3.50 

Sicom    Nov  RSS3    Untraded             - 

Sicom    Nov  TSR20   180.50 U.S cents/kg  Dn 3.50 cents/kg 

The following are today's physical prices in Asia, quoted in U.S. cents a  kilogram, FOB basis 

Grade  Shipment  Oct 13                  Oct 10 

                 Bids     Offers         Bids     Offers 

RSS3   Nov       -        196            -        199 

STR20  Nov       -        194            -        196 

SIR20  Nov       -        196.2          -        200.6 

SMR20  Nov       -        194            -        196 

USS3   Oct            THB54.01/kg               THB64.09/kg 

Source : Dow Jones Newswires Monday, 13 October 2008 18:05:38