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Rubber declined from a five-month high as a drop in global stock markets raised concern that the economic recovery may falter and lower oil prices cut the appeal of the commodity as an alternative to synthetic products.
Futures shed as much as 0.9 percent after reaching 311.5 yen per kilogram ($3,685 a metric ton) on Sept. 22, the highest level since April 28. The price climbed for the second straight week, advancing 4.3 percent, the best performance since May 28.
Asian stocks fell, paring the MSCI Asia Pacific Index’s fourth straight weekly gain, after an increase in U.S. jobless claims damped the outlook for global growth. Oil declined on concern that U.S. fuel demand may decelerate.
“Weak economic data from the U.S. and Europe curbed investor appetite for riskier assets, leading to sales of the raw material,” Hisaaki Tasaka, an analyst at Tokyo-based broker ACE Koeki Co., said today by phone.
February-delivery rubber settled at 308.9 yen per kilogram on the Tokyo Commodity Exchange. The September contract, expiring today, climbed 1 percent to settle at 295.8 yen. The market was closed yesterday and Sept. 20 for holidays.
Asian stocks declined after the U.S. Labor Department reported claims unexpectedly increased by 12,000 to 465,000 in the week ended Sept. 18, as the unemployment rate remains near a 26-year high. Growth in Europe’s services and manufacturing industries weakened more than economists forecast in September, adding to signs the recovery is losing steam.
Oil for November delivery lost as much as 0.7 percent to $74.66 a barrel on the New York Mercantile Exchange before trading at $75.02 at 4:33 p.m. in Tokyo.
China, India
“The slowdown in demand growth from China and India pressured the rubber market,” Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co. “But low supply in top producing countries limits the downside,” he added.
Consumption of natural rubber in China, including the premium grade of compound rubber, is expected to increase 4.3 percent in the third quarter, compared with growth of 28 percent in the first quarter, the Association of Natural Rubber Producing Countries said in the monthly report.
Demand growth in India will probably slow to 1 percent in the July-to-September period, from 12.2 percent in the first quarter, the group said.
Losses in rubber futures were limited as wet weather constrained supply in Thailand, the world’s largest producer and exporter, Tasaka said.
Thai Rubber Gains
The cash price in Thailand advanced for a fifth day, climbing 0.2 percent to 109.35 baht ($3.55) per kilogram as persistent rain limits supply, according to the Rubber Research Institute of Thailand. The rain will probably continue across the country in the second half of September, the Thai weather office said on its website.
Drought earlier this year followed by heavy rain has hampered tree-tapping across plantations in Asia, according to Pongsak Kerdvongbundit, managing director of Phuket, Thailand- based Von Bundit Co.
Natural-rubber consumption will outpace supply by 127,000 tons next year, the widest production deficit since 2007, according to Goldman Sachs Group Inc. Stockpiles will drop 12 percent to 67 days of demand in 2011, the lowest level in at least 11 years, the bank estimated in a report this month.
The Shanghai rubber market is closed today for a holiday. The March-delivery contract last traded at 26,805 yuan ($4,004) a ton on Sept. 21.
Source: Bloomberg