Rubber futures traded close to the lowest level in more than two months as investors remained cautious about demand growth prospects.
The contract for delivery in August dropped as much as 0.4 percent to 286.4 yen a kilogram ($3,074 a metric ton) and was at 287 yen on the Tokyo Commodity Exchange at 12:17 p.m. local time. Futures closed at 283.9 yen on March 4, the lowest since Dec. 20.
Rubber has declined 5 percent this year partly because of concern that automatic U.S. spending cuts that began this month may lower gross domestic product by 0.6 percentage point and cost 750,000 jobs by the end of 2013, according to the Congressional Budget Office.
“The market was weighed down by demand concerns,” Naohiro Niimura, partner at research company Market Risk Advisory in Tokyo, said today in an e-mail. “We cannot ignore the impact of U.S. spending cuts. The budget issue may reduce the U.S. growth by 0.5 to 0.6 percentage points, curbing raw-material demand.”
The contract for September delivery on the Shanghai Futures Exchange fell 0.4 percent to 24,205 yuan ($3,894) a ton. Thai rubber free-on-board was unchanged for a third day at 88.75 baht ($2.98) a kilogram yesterday, according to the Rubber Research Institute of Thailand.