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JAKARTA, Oct 29 (Reuters): Asian rubber prices were steady Friday but supported by expectations producers will not drop their offer levels since raw material costs are near selling prices.
Supplies coming to market will tighten next week as persistent rain in Thailand and one-week Muslim festival holiday in Indonesia and Malaysia, providing price support.
"Producers are not going to drop their prices. They're getting no material next week and their factories shut down. Physical prices are not moving anywhere next week," said a Singapore dealer.
Major tyre makers have been covering their needs for nearby shipments recently and China has been seen bargain-hunting.
Top Japanese tyre maker Bridgestone Corp. bought Thai RSS3 rubber sheet for January shipment overnight at $1.65 a kg.
On Friday, offers for RSS3 were virtually unchanged on the day, while buyers were bidding at $1.64 a kg. Offers for tyre- grade Standard Thai Rubber, or STR20 block, for December and January shipment were flat at $1.67 a kg.
The most active March 2006 rubber O JRU: contract on the Tokyo Commodity Exchange fell to a low of 186.8 yen per kg before rebounding to 191.8, up 3.2 yen, by Friday's close. March had dropped around three per cent since Monday. Other contracts rose between 0.5 and 3.6 yen.
Supplies in Thailand, the world's top producer and exporter of rubber, have shrunk because of the rainy season in the key growing south area that began this month and is likely to last until the end of November. The heavy rains hamper cultivation.
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