Tapping has resumed in Thailand after heavy rains caused flooding in rubber plantations last week, raising fear of a supply disruption in the world's largest producer.
Supply has also improved in neighbouring Malaysia, said dealers. "The weather is very good. There are no more rains and everything is back to normal.
I think the price should be lower," said a dealer in Malaysia's northern state of Penning. Tyre-grade SMR20 was unchanged at $1.67 a kg for February shipments.
Indonesian dealers said SIR20 for February shipments was sold at 74.25 US cents per pound ($1.64 a kg) free on board (FOB) Plumbing port in South Sumatra and at 74.50 cents free on board Belawan in North Sumatra.
SIR20 for March was also traded in Belawan at 74.75 cents. Singapore dealers, who normally sell rubber to China, bought the cargoes. SIR20 was offered at 74.75 cents for February and at 75.00 for March FOB Belawan, steady from Tuesday's offers.
Dealers said many consumers were in favour of Indonesia, the world's second-largest producer, because it offered the cheapest tyre-grade rubber in the region.
Thailand's tyre-grade STR20 was little changed at $1.72 per kg for February and at $1.73 for March shipment. RSS3 rubber sheet was also unchanged at $1.72-$1.73 per kg.
"If consumers want to buy rubber, I think they will focus on Indonesia. But we are expecting the local market to come down," said a dealer in Thailand's southern city of Hat Yai.
Despite slow demand in Thailand and Malaysia, the local price was supported by the Tokyo rubber futures, which hit a two-week high on a weaker yen.
The Japanese market also ignored a slight increase in domestic rubber stocks. The new June 2006 benchmark contract on the Tokyo Commodity Exchange rose 4.3 yen per kg to 216.5 yen ($1.85).
Crude rubber stocks held at private Japanese warehouses rose to 8,406 tonnes as of December 20 from 8,395 tonnes on December 10, the Rubber Trade Association of Japan said on Wednesday.
Domestic crude rubber stocks have stayed at low levels since May as domestic end-users have turned to those inventories after delays in rubber shipments from Thailand, which has been hit this year by drought and violence in key rubber-producing areas.
Crude rubber stocks in Japan hit a record low of 7,106 tonnes in August. On the Shanghai futures exchange, the most active April 2006 rubber contract rose 190 yuan a tonne to 18,465 yuan ($2,288) per tonne on Wednesday.