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Tuesday, January 25, 2022

Rubber Pares Worst Quarter in Year on Hopes of U.S. Stimulus

Rubber recovered from a nine-month low, paring the biggest quarterly decline in a year, amid optimism the U.S. Federal Reserve will maintain stimulus after slower-than-estimated growth in the U.S. economy.

The contract for delivery in December rose as much as 1.9 percent to 231.5 yen a kilogram ($2,358 a metric ton) on the Tokyo Commodity Exchange and was at 230.3 yen at 11:02 a.m. Futures have lost 16 percent this quarter, the most since the three months ended June 2012.

Asian stocks extended a global rebound, following gains of U.S. indexes after the world’s biggest economy revised its reading for first-quarter growth lower and as a drop in Chinese interest-rate swaps eased concerns over a cash crunch.

“The U.S. GDP revision lower yesterday makes market participants believe that the Fed’s tapering might be postponed,” said Naohiro Niimura, a partner at research company Market Risk Advisory Co. in Tokyo.

Gross domestic product for the U.S. expanded at a revised 1.8 percent annualized rate from January through March, down from a prior estimate of 2.4 percent, figures from the Commerce Department showed yesterday in Washington.

The U.S. consumed about 950,000 tons of rubber, or about 9 percent of global demand last year, according to the International Rubber Study Group.

Rubber for January delivery on the Shanghai Futures Exchange added 1.7 percent to 17,930yuan ($2,916) a ton. Natural-rubber inventories rose for a third week, climbing 48 tons to 114,556 tons, the bourse said June 21.

Thai rubber free-on-board dropped 0.2 percent to 85.40 baht ($2.75) a kilogram yesterday, according to the Rubber Research Institute of Thailand.

Source: Bloomberg

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