Rubber futures in Tokyo reached a five-month low as stockpiles in China continued expanding, deepening concern that demand from the largest user is slowing.
The contract for delivery in June on the Tokyo Commodity Exchange dropped as much as 3.9 percent to 246.4 yen a kilogram ($2,385 a metric ton), the lowest level since Aug. 8, and was at 247.1 yen at 10:14 a.m. local time. Futures extended last week’s 6.6 percent drop, the most since the five days through April 19. Markets in Tokyo were closed yesterday for a holiday.
Inventories monitored by the Shanghai Futures Exchange expanded 8 percent to 190,158 tons by Jan. 9, the highest level since October 2004, data from the bourse showed. The commodity, used in tires, has slumped 9.7 percent this month in Tokyo.
“Swelling stockpiles in China fueled concern that the Chinese market is oversupplied,” saidKazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo.
Rubber also fell as the Japanese currency strengthened against the dollar, reducing the appeal of yen-denominated contracts, he said. The yen rose to 103 per dollar today, nearing a three-week high reached yesterday, as a sell-off in global stocks boosted demand for the currency as a haven.
Futures for May delivery on the Shanghai bourse gained 0.4 percent to 16,410 yuan ($2,716) a ton after earlier reaching 16,235 yuan, the lowest intra-day level since July 2009. China’s imports rose to a record 350,000 tons last month, customs data on Jan. 10
Rubber free-on-board gained 0.4 percent to 78.25 baht ($2.37) a kilogram yesterday, according to the Rubber Research Institute of Thailand.