This entry was posted on Tuesday, October 6th, 2009 at 7:46 pm and is filed under Rubber News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
Oct. 6 (Bloomberg) — Rubber dropped for a third day on a decline in crude oil and as an advance in Japan’s currency against the dollar made the yen-denominated contracts less attractive to investors.
Futures in Tokyo retreated after earlier gaining by as much as 1.1 percent. The market failed to advance as a rally in oil halted, easing speculation costs for rival synthetic rubber made from petroleum may increase, said Hisaaki Tasaka, analyst at Tokyo-based commodity broker ACE Koeki Co.
“The futures lost support from the energy and currency markets,” Tasaka said by phone today. Industrial commodity prices were also capped by concern that an economic recovery may falter after U.S. unemployment worsened last month, he added.
March-delivery rubber fell as much as 0.6 percent to 199.2 yen a kilogram ($2,235 a metric ton) on the Tokyo Commodity Exchange before trading at 200 yen at 11:24 a.m. local time. The Shanghai Futures Exchange is closed for a holiday.
Futures tend to move in the same direction as oil as competing synthetic rubber is made from naphtha, distilled from petroleum. Crude oil for November delivery fell 0.1 percent to $70.37 a barrel in electronic trading on the New York Mercantile Exchange at 10:58 a.m. Tokyo time. Yesterday, the contract gained 46 cents to settle at $70.41.
The yen rose to 89.02 per dollar at 10:59 a.m. in Tokyo from 89.53 in New York yesterday. A stronger yen is negative for the price of rubber futures as the commodity trades globally in dollars.
Rubber futures extended declines after U.S. job losses accelerated in September, raising concern a slow economic recovery may curb demand for the commodity used in tires. U.S. employers cut 263,000 positions last month and the jobless rate climbed to 9.8 percent, the highest level since 1983, according to the U.S. Labor Department.
Futures were also capped by concern that U.S. auto sales may continue to slump after a purchasing incentive program ended, Tasaka said. Auto sales plunged 23 percent last month, and the seasonally adjusted annual sales rate dropped to 9.22 million units, according to industry researcher Autodata Corp. of Woodcliff Lake, New Jersey.
Source: Bloomberg