S'pore rubber futures hit by rupiah

S'pore rubber futures hit by rupiah

SINGAPORE (Reuters): Rubber futures on the Singapore Commodity Exchange (SICOM) fell along with Tokyo and on fears of further weakness as the Indonesian rupiah tumbled, dealers said yesterday.

"The market is partly depressed by Japan. Also, consumers feel there is more weakness to come, especially in Indonesian prices given the weaker rupiah," said a dealer with a European house.

In Tokyo rubber futures, the benchmark May contract fell 2.8 yen to end at 88.7 yen on weak fundamentals and high stocks.

Indonesian tire-grade SIR20 rubber prices were stable but sentiment was jittery due to the rupiah's sharp drop on Tuesday, when it fell to a low of 4,600 to the U.S. dollar on rumors, officially denied, that President Soeharto was in poor health.

Dealers said Japan's drop to below 90 yen signaled further price erosion for the rubber market.

"Now that Japan has broken 90 yen, we are expecting the May contract to test 85 yen," said another dealer.

Dealers were, however, reluctant to indicate support levels for rubber futures in the SICOM.

On SICOM, the tire-grade RSS3 February contract was 65.25 U.S. cents per kg against 66.25 on Tuesday.

The February TSR20 FOB contract ended at a low of 74.75 U.S. cents per kg compared to 75.50 previously.

In Jakarta, tire-grade SIR20 offer prices were weaker in late trading on Wednesday amid a lack of buying interest and concerns over the exchange rate, traders said.

They said a deal was done overnight at 32.75 U.S. cents/lb fob Palembang for February shipment. Offer prices for January shipment were quoted at 32.75 fob Padang.