SINGAPORE (Dow Jones)–Asia rubber settled lower Wednesday as crude oil prices extended losses in Asian trading hours after falling 4% overnight due to fresh euro-debt fears.

Natural rubber futures on Shanghai Futures Exchange settled 1.9% lower, tracking weak crude oil and in line with the decline in SHFE metal futures, Orient Securities Futures analyst He Jing said.

Beijing”s program to subsidize auto sales in rural areas expires this month, which “may dent market sentiment for auto sales and will in turn weigh on a price rebound”, He said.

Prices on the Singapore Commodity Exchange also tumbled.

The Tokyo Commodity Exchange and the Agricultural Futures Exchange of Thailand were closed for national holidays.

In the spot market, prices mostly fell, as the market expects more supply to come onstream due to the impending end of low-output wintering season. However, traders in major producing countries said that the weather is still dry and supplies remain tight.

However, even with the current downward correction in physical rubber prices, they are expected to stay high for the rest of 2010 on the back of an upward trend spurred by the global economic recovery, said Yium Tavarolit, chief secretary and economist of the International Rubber Consortium.

Price corrections we are seeing now are the result of rubber futures being overbought in April and then moving lower, Tavarolit added.

Asian Rubber Futures May 05 Change from previous close Tocom Oct RSS3 Closed – Shanghai Sep SCR5 CNY22,860/ton Down CNY435/ton Thai Dec RSS3 Closed – Sicom Jun RSS3 354 U.S. cents/kg Down 9 U.S. cents/kg Sicom Jun TSR20 292 U.S. cents/kg Down 8.8 U.S. cents/kg
The following are physical prices in Asia, quoted in U.S. cents/kg, free on board.

Grade Shipment May 05 May 04 Bids Offers Bids Offers RSS3 Jun/Jul – 350 – 365 STR20 Jun/Jul – 310 – 308-310 SIR20 Jun/Jul – 293 – 302 SMR20 Jun/Jul – 307-308 – 308 USS3 May Closed THB108.22-THB111.33/kg

Source: Dow Jones

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