"There are no real fundamental issues out there to give prices any impetus. Even on a regional basis, the physical market is in a lull," a Singapore-based rubber trader told Reuters.

Indonesian rubber traders are expected to stay sidelined--more on a lack of interest after forwards deals were completed last week, than on the impact of weekend violence that left 14 people dead in political and religious clashes. Deals were done for January and March SIR20 rubber last week, but many traders said they were still reluctant to sell their goods because of the stronger rupiah, which has gained to about 7,475 to the US dollar from a low this year of 17,000. "It's going to be quiet. Buyers show no fresh interest after the recent purchases for January and March rubber," said one trader in Jakarta.

January SIR20 finished last week at 26.25 US cents/lb fob Medan,Palembang and Surabaya. Prices hovered at 26.00 fob Padang, Pontianak and Jambi.January rubber was sold at 26.50 fob Medan, Palembang and Surabaya on Thursday. Deals for March rubber were done at 27.25 in the three centres. Thai rubber eased at the end of last week with buyers turning their attentions to Indonesia which, despite the rupiah's rise, is still offering cheaper material. Despite the near-term bearishness, some traders reported French tyre maker Michelin was renewing contracts to buy more rubber next year. Traders said Michelin had sent officials to the Thai rubber trading centre of Hat Yai last week to renew supply contracts. The size of the deals was unclear, but trade sources said the amounts were slightly more than this year.

"But Michelin is shifting more to STR and not RSS grade this time. This year it bought more than 10,000 tonnes a month," said one supplier.

Thai rubber ended the week at around 63-65 cents a kg FOB for RSS3 January shipment. STR20 for the same shipment was quoted at 62cents a kg.

Malaysia seemed to offer most hope of a rise this week, with prices forecast to gain slightly if there was intervention by the International Natural Rubber Organisation (INRO). "If INRO comes in, then we may see some activity," a dealer at a Malaysian trading firm said. INRO can still intervene in the market as the group's five-day moving average is still within the "may-buy" range of 172 and 183 Malaysian/Singapore cents a kg. Another factor pointing to a gain was a lack of selling by producers, seen holding back stocks in anticipation of a supply shortage if production is disrupted by the La Nina weather system. La Nina is caused by colder than normal temperatures in the Pacific Ocean bringing wetter weather that could disrupt tapping. Dealers were nevertheless cautious about prospects. "It's going to be a quiet week. Demand from consumers is not strong. Buyers are not keen as they are waiting for attractive levels," said a dealer.