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Wednesday, August 17, 2022

Rubber Set for Biggest Weekly Drop Since April on China Demand

Rubber in Tokyo declined, heading for the biggest weekly loss since April, amid speculation thatChina’s economy is slowing and will weaken demand for the commodity used in tires.

The contract for delivery in June on the Tokyo Commodity Exchange fell as much as 1.1 percent to 254.1 yen a kilogram ($2,424 a metric ton), matching a two-month low reached Jan. 7. Futures traded at 255.8 yen at 10:33 a.m. local time and have lost 6.8 percent this week, the most since the five days through April 19.

Growth in Chinese exports and imports probably slowed last month, according to a Bloomberg survey before data today, after declines in consumer prices and manufacturing stoked concern Asia’s largest economy is faltering. The main car association in China, the biggest user of rubber, forecast that the nation’s automobile market will see slower growth this year as anti-pollution and austerity campaigns spread.

“Concern increased that raw-material demand from China will weaken,” said Naohiro Niimura, partner at research company Market Risk Advisory in Tokyo.

China, which in 2013 became the first country to have domestic sales surpass 20 million vehicles a year, will see deliveries rise as much as 10 percent in 2014 after last year’s 14 percent growth, the state-backed China Association of Automobile Manufacturers said yesterday.

Rubber for May delivery on the Shanghai Futures Exchange lost 0.3 percent to 16,810 yuan($2,776) a ton. It fell to 16,735 yuan on Jan. 8, the lowest close for a most-active contract since September 2009.

Rubber free-on-board was unchanged at 78.15 baht ($2.37) a kilogram yesterday, according to the Rubber Research Institute of Thailand.

Source: Bloomberg

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