TOKYO, Dec 3 (Reuters) – Tokyo rubber futures closed mostly firmer on Wednesday, supported by higher oil and stock prices improving investor sentiment, although the key contract briefly slipped to a five-year low as falling demand weighed on the industrial commodity used for tyres.
* The key Tokyo Commodity Exchange rubber contract for May delivery <0#JRU:> closed at 117.6 yen per kg, up 1 yen or 0.9 percent, after earlier hitting a trough of 113.3 yen, the lowest for any benchmark since July 2003.
* The market is grappling for a level at which it can stabilise, an analyst said.
* “The magnitude of the current financial crisis is such that none of us have faced, and it’s difficult for us to tell where the bottom is,” he said.
* He said some believe that the market will bounce back once the near-term contract breaches 100 yen. The front-month December contract closed at 107 yen after falling as low as 105.2.
* U.S. crude rose above $47 a barrel on Wednesday in a correction after falling more than $2 the previous day, driven lower by the gloomy economic outlook and news that OPEC had not fully complied with its pledged output cuts in November. [O/R]
* Japan’s Nikkei share average <.N225> rose 1.8 percent, buoyed by a jump in retailer Seven & I Holdings <3382.T> after a brokerage upgrade, though automakers weighed on the market in the face of a sharp drop in U.S. car sales. [.T]
* General Motors Corp warned the U.S. government on Tuesday that it needs a $4 billion loan by the end of December or it faces the risk of immediate failure. [ID:nN02272562]
* The global economic slowdown has forced production cuts at automakers including at Toyota Motor Corp <7203.T>, the world’s largest, leading to concerns about demand for rubber. * The world’s top rubber-producing countries are due to meet next week in Indonesia to discuss ways to support prices. [ID:nBKK372175]
* But traders were sceptical of the results. “Only talking will not help the market,” a Thai-based trader said. Specific action must be taken to help prop up prices, he said.
* Concerns about the economy have also slowed trading in the physical market.

PRICES OF ASIAN PHYSICAL RUBBER COMPARED WITH TUESDAY
Grade Price Change
Thai RSS3 (Jan) $1.25/kg -$0.05
Thai RSS3 (Feb) $1.25/kg -$0.05
Thai STR20 (Jan) $1.25/kg -$0.05
Thai STR20 (Feb) $1.25/kg -$0.05
Malaysia SMR20 (Jan) $1.25/kg -$0.05
Malaysia SMR20 (Feb) $1.25/kg -$0.05
Indonesia SIR20 (Jan) $0.55/lb -$0.04
Indonesia SIR20 (Feb) $0.55/lb -$0.04
Thai USS3 37 baht/kg -3 bahts
Thai 60-percent latex (drums, Jan) $1,120/tonne unchanged
Thai 60-percent latex (bulk, Jan) $1,000/tonne unchanged

Source:  Reuters

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