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Rubber declined for a second day, extending a retreat from a three-month high, on concern that the global economic recovery may be faltering, hurting demand for the commodity used to make tires.
Futures in Tokyo declined as much as 1.2 percent after climbing 3.7 percent last week. The price reached 295.2 yen per kilogram ($3,459 per metric ton) on Aug. 20, the highest level since May 6.
Most Asian stocks fell amid mounting concern the global economy may be weakening after calls by a European Central Bank official to maintain stimulus measures. Purchases of new and existing U.S. houses fell 12 percent to a 5.01 million annual pace, the lowest since March 2009, according to the median forecast of 54 economists surveyed by Bloomberg News ahead of reports due this week.
“Worries about economies sapped investor appetite for riskier assets,” leading to sales of industrial commodities including rubber, Kazuhiko Saito, an analyst at Tokyo-based broker Fujitomi Co., said today by phone.
January-delivery rubber dropped as much as 3.5 yen to 287.6 yen per kilogram on the Tokyo Commodity Exchange before settling at 289.3 yen.
Japan’s Nikkei 225 Stock Average slumped to a nine-month low after European Central Bank council member Axel Weber said emergency lending should be extended, indicating that the region’s debt crisis may take longer to solve.
Emergency Funds
Weber said on Aug. 20 that the ECB should help banks through end-of-year liquidity tensions before determining in the first quarter when to withdraw emergency-lending measures. The comments on the need to keep open the flow of emergency funds go beyond what ECB President Jean-Claude Trichet has announced.
Today’s drop in the rubber price was limited on concern that rains in southern Thailand, the largest producer, will probably affect supply, Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co., said by phone from Bangkok.
Heavy rainfall is expected across Thailand this week as tropical storm Mindulle has developed, the Thai Meteorological Department said on its website.
Cash-rubber prices in Thailand were unchanged at 105.5 baht ($3.35) per kilogram today, the Rubber Research Institute of Thailand said on its website.
January-delivery rubber on the Shanghai Futures Exchange lost 0.7 percent to close at 25,095 yuan ($3,691) a ton.
Source: Bloomberg