SINGAPORE (Apr 30): A few cargoes of tyre grade rubber changed hands among trading houses this week, but some sellers shunned the physical market as prices hovered near multi-year lows despite recent gains, dealers said on Wednesday.

The dry wintering season in Thailand, Indonesia and Malaysia has failed to help physical prices resist pressure from benchmark Tokyo futures, which have plunged more than 20 percent this year on fears about China's slowing economy.

Rubber is tapped year round but latex output drops during the dry wintering season, when trees shed leaves. Wintering in Thailand and Malaysia lasts from February to April. In Indonesia, wintering lasts from February to May before starting again in July through September.

Thai RSS3 was traded late on Tuesday at $2.11 to $2.12 a kg for June delivery, versus $2.05 last week. Another grade, STR20, was offered at $1.84 a kg, higher than last week's traded prices of $1.76, but about 16 cents lower than the price of unsmoked rubber sheet, which farmers sell to factories.

Indonesian and Malaysian grades were traded at between $1.76 and $1.85 a kg, dealers said.

"The price of STR20 is still below cost," said a dealer in Thailand. "I didn't hear any deals and I think buyers are probably looking to buy when the wintering has ended, which means more supply."

On Singapore's SICOM exchange, the TSR20 contract - which covers Thai, Indonesian and Malaysian grades - plunged to its weakest since mid-2009 last Monday at 160.20 U.S. cents a kg. It has since risen to around 175 cents.

The most active October rubber contract on the Tokyo Commodity Exchange was on course for an 11-percent drop in April.

Indonesia's SIR20 was traded at $1.76 to $1.79 a kg for June, higher than last week's offer prices of $1.69 to $1.71 cents.

"Many people are still refusing to sell. It's very hard to do business when prices keep falling. Farmers are not willing to tap rubber," said a dealer in Indonesia's main growing island of Sumatra.

There were no signs the International Rubber Consortium (IRCo), which represents rubber producers in Thailand, Indonesia and Malaysia, will intervene to support prices.

The three Southeast Asian nations last acted jointly in 2012 to 2013, agreeing to cut exports by 300,000 tonnes, or 3 percent of 2012 global output.

Malaysia's SMR20 was traded at $1.85 a kg, versus $1.73 to $1.80 a kg last week.

"Rubber prices are so low, and I think in Malaysia tappers prefer to do other jobs at factories," said a dealer in Singapore, who trades SMR20.

WEEK AHEAD

Traders will remain cautious next week as prices could fall back if selling resumes on Tokyo futures.