Rubber futures in Tokyo declined for the first time in three days after manufacturing expanded at the slowest pace in four months in China, the largest consumer of the commodity used in tires.
The contract for delivery in December slipped as much as 1 percent to 233.9 yen a kilogram ($2,356 a metric ton) on the Tokyo Commodity Exchange and was at 234.8 yen at 12:13 p.m. local time. Futures lost 14 percent last quarter, the biggest decline in a year.
The Purchasing Managers’ Index was at 50.1, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. That was down from May’s 50.8. Readings above 50 signal expansion. Weaker gains in manufacturing add to odds that Li Keqiang will become the first premier to miss an annual growth target since the Asian financial crisis in 1998.
“The yen-driven rally in rubber lost steam as concerns about Chinese demand strengthened,”Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said by phone today.
China’s expansion probably slowed for a second straight quarter, based on the median estimate in a Bloomberg News analyst survey, after export growth collapsed and Li reined in record credit expansion to contain shadow-banking risks.
Global rubber stockpiles will probably expand to the highest in more than a decade as slower economic growth damps demand, according to The Rubber Economist.
Rubber for January delivery on the Shanghai Futures Exchange added 0.8 percent to 17,875yuan ($2,916) a ton. Thai rubber free-on-board gained 0.9 percent to 86.15 baht ($2.78) a kilogram June 28, according to the Rubber Research Institute of Thailand.