Rubber declined the most in a week as a drop in oil eased speculation that prices of competing synthetic products will increase and as Thailand, the biggest producer, entered a recession for the first time since 2009.
Rubber for delivery in January fell as much as 1.6 percent to 262.3 yen a kilogram ($2,685 a metric ton), the most for a most-active contract since Aug. 13, and traded at 263.8 yen on theTokyo Commodity Exchange at 12:09 p.m. local time.
West Texas Intermediate crude fell for the first time in seven days yesterday as the threat of a storm in the Gulf of Mexico dissipated, removing a risk to oil and gas production in the area. Asian stocks dropped for a fourth day as Thailand entered a recession and India’s currency tumbled to a record low.
“As emerging economies showed signs of weakening, concerns grew over rubber demand,” said Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo.
Rubber for delivery in January dropped 0.4 percent to 19,775 yuan ($3,229) a ton on theShanghai Futures Exchange. Natural-rubber inventories increased 4,457 tons to 122,645 tons, the highest level since February 2010, the bourse said on Aug. 16 based on a survey of nine warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin.
Thai rubber free-on-board added 0.9 percent to 81.75 baht ($2.60) a kilogram yesterday, according to the Rubber Research Institute of Thailand. The Thai government plans to spend 30 billion baht to support farmers and rubber processors, Deputy Prime Minister Yukol Limlamthong said Aug. 15. The country has no plan to sell state inventories, he said.