Setting the tone for global rubber prices, Tokyo rubber futures have rallied on tight supply in producing countries, especially in Thailand, and on lower stocks in Tokyo.
"I expect the outlook is bullish and prices should be higher even with China tending to be sidelined and bidding below TOCOM prices, they still need to buy," said a Singapore dealer.
The Thai market was closed for a holiday marking Chulalongkorn day and trading will resume on Tuesday. "It's quiet because Thailand is on holiday, everybody is basically watching where TOCOM is heading," said one Singapore dealer.
In Japan, the benchmark March 2006 rubber contract on the Tokyo Commodity Exchange rose 2.2 yen per kg to 197.5. On the Singapore Commodity Exchange, prices of INT2 Ribbed Smoked Sheet for November rose to 290.25/291.25 Singapore cents per kg on Monday, up from Friday's close of 288.75/289.75 Singapore cents.
Tyre-grade SMR20 was unchanged at $1.63 per kg for November shipment in Malaysia, while SIR20 was offered by dealers in Indonesia at $1.62 per kg for December delivery.
SIR20 traded at $1.61 per kg late on Friday, on a free-on-board basis from Begawan port in North Sumatra. The rainy season that began this month in Thailand and Indonesia is expected to keep supplies tight.
The monsoon should continue at least until the end of November. Raw material prices in Indonesia were up 500 rupiah to 16,000 rupiah ($1.59) a kg in the southern part of Indonesia's Sumatra, partly because small holders have sold most of their stocks to buy food and new clothes.
"With the Muslim festival coming next month, supplies will be a bit tightened and that should support prices in the near term," said one Indonesian trader.
Most halt production during the weeklong holiday of Eid-ul-Fitr, which marks the end of Ramazan. On Friday, Thailand tyre-grade rubber, STR20 sold at $1.66 per kg to a tyre-maker for January to March shipment.
Thai 60-concetrated latex was traded at $1,175 per tonne, including cost, insurance and freight, for December shipment.