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Feb. 19 (Bloomberg) — Natural rubber futures dropped for a third day to the lowest in almost two months after Bridgestone Corp., the world’s largest tiremaker by sales, forecast a 71 percent profit drop this year.
Futures in Tokyo lost as much as 4.3 percent to the lowest since Dec. 26. Tokyo-based Bridgestone said in a statement today. Net income will likely fall to 3 billion yen ($32 million) from 10.4 billion yen last year as tire sales are expected to drop in Japan, North America and Europe.
“Rubber demand won’t recover anytime soon,” Shuji Sugata, research manager at Mitsubishi Corp. Futures & Securities Ltd., said by phone. “The slump in demand for materials used in cars may continue throughout this year.”
Rubber for July delivery, the most-active contract, lost 3.2 percent to settle at 132.0 yen a kilogram ($1,412 a metric ton) on the Tokyo Commodity Exchange.
Futures have lost 3 percent this year on concern a deepening slump in global economies will weaken demand for the commodity used to make vehicle tires. Bridgestone may scale back or postpone plans to build a factory in Poland and increase production in Thailand and Indonesia, the Nikkei newspaper reported today.
Toyota Motor Corp., the world’s biggest carmaker, will slash domestic production 54 percent in the current quarter as demand plunges in the U.S. and Japan. The company’s output, excluding its Daihatsu Motor Co. and Hino Motors Ltd. units, will drop to about 519,000 vehicles in the three months ending in March, compared with 1.13 million units a year ago, according to figures derived from Toyota’s latest full-year forecast.
Currency Limits Losses
Losses in rubber futures were limited after the Japanese currency tumbled to the lowest in six weeks against the dollar yesterday, raising the appeal of yen-denominated contracts.
The dollar advanced after U.S. President Barack Obama released a $275 billion housing program to stem foreclosures. The dollar traded at 93.55 yen by 6:22 p.m. in Tokyo.
May-delivery rubber on the Shanghai Futures Exchange, the most-active contract, lost 4.9 percent to 12,695 yuan ($1,857) a ton.
Source: Bloomberg