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Thursday, August 11, 2022

Rubber Poised for Fifth Weekly Drop on China Demand Concerns

Rubber in Tokyo headed for a fifth weekly decline, the longest run since June, on concern that slowing growth in China, the biggest buyer, may weaken demand for the commodity used in tires.

The contract for delivery in June on the Tokyo Commodity Exchange lost as much as 1.5 percent to 252.5 yen a kilogram ($2,422 a metric ton), before trading at 253.1 yen at 12:14 a.m. local time. Futures fell 1.3 percent this week.

China’s factory output and investment growth probably weakened in December, adding to signs the world’s second-largest economy is losing momentum as analysts forecast 2014 expansion at the lowest in 24 years. Rubber inventories in Qingdao, China’s main hub for the commodity, advanced 4.7 percent from the end of last month to 304,300 tons on Jan. 16, according to the Qingdao International Rubber Exchange.

“Demand may be sluggish with the Chinese economy showing signs of slowing,” said Takaki Shigemoto, an analyst at JSC Corp., a research company in Tokyo. “Rising stockpiles in China raised concerns that rubber purchasing may slow.”

Futures for May delivery on the Shanghai Futures Exchange fell 1.6 percent to 16,490 yuan($2,724) a ton. Rubber free-on-board added 0.3 percent to 77.75 baht ($2.37) a kilogram yesterday, according to the Rubber Research Institute of Thailand.

Source: Bloomberg

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