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Wednesday, August 17, 2022

Rubber Erases This Year’s Gains on Fed Minutes, Thai Supplies

Rubber futures declined for a third day, wiping out this year’s advance, as U.S. Federal Reserveminutes showed a debate over stimulus and on concern that Thailand will increase supplies.

The contract for July delivery on the Tokyo Commodity Exchange fell as much as 2.8 percent to 296.7 yen a kilogram ($3,169 a metric ton), the lowest level since Dec. 27, and was at 297.6 yen at 11:58 a.m. Futures have retreated 1.6 percent this year.

An index of leading indicators in the U.S. may show the recovery is on track, fanning speculation that the Federal Reserve may scale back stimulus, after minutes from its January meeting released yesterday showed debate over the pace of asset purchases. The Thai government will review a program to support prices by purchasing the commodity from farmers when it expires at the end of March, raising concerns supplies from the largest exporter will increase.

“Rubber tracked losses in oil and other industrial metals amid speculation the Federal Reserve may curtail monetary stimulus,” said Takaki Shigemoto, analyst at research company JSC Corp. “Concerns that Thailand will end price-support measures also put pressure on the commodity.”

The contract for September delivery on the Shanghai Futures Exchange lost 3.4 percent to 24,935 yuan ($3,994) a ton. Thai rubber free-on-board fell 1.8 percent to 94.70 baht ($3.17) a kilogram yesterday, according to the Rubber Research Institute of Thailand.

Source: Bloomberg

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