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Rubber slumped as China, the largest user, will raise commodity futures margins to cool prices and as growers in Indonesia, the second-biggest exporter, boost output to benefit from record prices.
May-delivery rubber on the Tokyo Commodity Exchange fell as much as 3 percent to 351.7 yen per kilogram ($4,191 a metric ton) before settling at 355.2 yen. The most-active contract, which reached a 30-year high of 383 yen on Nov. 11, is set for the worst weekly loss since July 2. Futures in Shanghai tumbled by the daily limit to the lowest level since Oct. 13.
The Shanghai Futures Exchange will increase margins and daily price limits in the latest move by China to curb speculation and cool inflation. Margins on rubber will rise to 13 percent after the market closes on Nov. 29, the bourse said in a statement. Daily price limits will widen to 6 percent from Nov. 30, according to the exchange.
“China is adding steps to curb inflation, boosting speculation that their demand may weaken,” Takaki Shigemoto, an analyst at JSC Corp. in Tokyo, said today by phone. “Investors are becoming concerned that market fundamentals won’t be as tight as earlier expected.”
Natural rubber supply this year may be more than forecast last month as growers in Indonesia boost output to benefit from record prices, the Association of Natural Rubber Producing Countries said in an e-mailed statement yesterday.
Increased Output
Production may increase 6.6 percent to 9.5 million tons, more than the 9.4 million tons forecast on Oct. 27, the producers group said. Supply may drop 3.8 percent in the three months to Dec. 31 as rain disrupts tapping in Thailand, the biggest producer and exporter, it said.
May-delivery rubber in Shanghai lost as much as 2.9 percent to close at a daily limit of 30,375 yuan ($4,560) a ton. The price reached a record 38,920 yuan on Nov. 11.
China, the biggest consumer of commodities, pledged to control prices and may raise interest rates a second time this year to slow the fastest inflation in two years and curb food costs that jumped 10.1 percent in October.
China’s consumption of natural rubber, including compound rubber, may drop 2 percent in the fourth quarter as the government takes steps to cool commodity prices, the association of producer countries said. Imports of all forms of natural rubber may climb 7.1 percent to 3.26 million tons this year and gain 6 percent to 3.45 million tons in 2011, the group said.
“Natural rubber markets do not appear to have received any notable support from the demand side,” Jom Jacob, the group’s senior economist, said in the statement. “Concerns over China’s new policy measures clouded demand expectations.”
The cash price of natural rubber in Thailand remained unchanged at 131.55 baht ($4.38) per kilogram today, as concern over Chinese measures to curb inflation was offset by limited supply, according to the Rubber Research Institute of Thailand. The price reached a record 132.75 baht per kilogram on Nov. 23.
Source: Bloomberg