Asian rubber market haunted by crisis

Asian rubber market haunted by crisis

SINGAPORE (Reuters): Rubber futures on the Singapore Commodity Exchange (SICOM) were trapped in a bear den yesterday on expectations of further falls, dealers said.

"The market is really very quiet. The volume is not very good. Demand is negligible ahead of Christmas," said a dealer with a major trading house.

Asia's rubber market remained haunted by the regional economic crisis, which saw further battering of currencies on Tuesday, notably of the Indonesian rupiah and the South Korean won.

On SICOM, the tire-grade RSS3 February contract settled at 66.25 U.S. cents per kg against 66.75 on Monday.

The February TSR20 FOB contract was at 75.50 U.S. cents per kg compared to 76.00 previously.

In Jakarta, Indonesian tire-grade SIR20 rubber prices continued to fall in late trading on Tuesday amid a bleak outlook and a lack of fresh factors, traders said.

"Offer prices are falling again. We are now also watching the fall of the rupiah against the U.S. dollar, which will eventually affect the market," said one trader in Jakarta.

Offer prices for February shipment were mostly quoted at 33.50 U.S. cents/lb in centers such as Medan, Surabaya and Palembang.

The Indonesian rupiah fall to a record low against the dollar, plunging almost 11 percent on the day as wild rumors about President Soeharto's health hit the foreign exchange market.

The rupiah hit a historic low of 4,600, down 450 points from an opening of 4,150 to the dollar. It settled at 4,550/65 to the dollar in Jakarta.