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Sept. 8 (Bloomberg) — Rubber dropped for the first time in four days on speculation that recent price gains may curb demand and as a stronger yen reduced the appeal of the commodity used in vehicle tires.
Futures in Tokyo lost as much as 1.4 percent, snapping a three-day winning streak in which the contract jumped 6 percent. The Japanese currency strengthened for the first day in four against the dollar, making yen-based contracts less attractive to investors.
“There’s nothing but a technical adjustment,” Takaki Shigemoto, analyst at Tokyo-based commodity broker Okachi & Co., said today. “We saw some selling interest above 210 yen.”
February-delivery rubber, the most-active contract, fell as much as 3 yen to 208.5 yen a kilogram ($2,247 metric ton) on the Tokyo Commodity Exchange before closing at 209.9 yen. Prices have surged 54 percent this year.
Shippers in Thailand left offers for RSS-3 grade rubber for October shipment unchanged at $2.13 a kilogram from yesterday, according to Shigemoto.
Rubber futures also declined amid speculation that rising supplies in China will cap prices, said Shuji Sugata, research manager at Mitsubishi Corp. Futures & Securities Ltd.
Inventories monitored by the Shanghai Futures Exchange increased 3,279 metric tons to 85,796 tons, the highest level since March 2008, the bourse said on Sept. 4.
Still, further declines may be limited as Shanghai rubber prices rallied after China’s benchmark stock index gained for a sixth day, boosting optimism that a global economic recovery will increase demand for commodities, Shigemoto said.
January-delivery rubber on the Shanghai Futures Exchange added 1.4 percent to settle at 18,315 yuan ($2,682) a ton. The Shanghai Composite Index added 1.7 percent to close at 2,930.475. The yen climbed to 92.55 per dollar as of 4:42 p.m. in Tokyo, from 93.08 in London yesterday.
Source: Bloomberg