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Wednesday, August 17, 2022

Rubber Set for Sixth Weekly Drop on Yen’s Rally, Demand Concerns

Rubber in Tokyo slid to a five-month low in its longest losing streak in almost a year as the Japanese currency strengthened amid growing concern that a slowdown in emerging economies will curb demand.

The contract for delivery in June on the Tokyo Commodity Exchange fell as much as 2.0 percent to 242.2 yen a kilogram ($2,342 a metric ton), the lowest level since Aug. 5, and was at 243.2 yen by 10:19 local time. Futures have dropped 3.9 percent this week, bringing losses this month to 11 percent.

The yen climbed the most in four months yesterday as a sell-off in global stocks boosted demand for the Japanese currency as a haven, reducing the appeal of yen-based futures. A preliminary report from HSBC Holdings Plc and Markit Economics indicated that manufacturing in China, the world’s largest rubber user, may contract for the first time in six months.

“Concerns about growth in China and other emerging economies deepened, raising speculation that raw-material demand may weaken,” said Takaki Shigemoto, an analyst at JSC Corp., a research company in Tokyo.

Rubber for May delivery on the Shanghai Futures Exchange lost 0.5 percent to 16,470 yuan($2,721) a ton. Rubber free-on-board fell 0.7 percent to 76.25 baht ($2.32) a kilogram yesterday, said the Rubber Research Institute of Thailand.

Anti-government protests in Thailand may curb rubber supply from the world’s largest exporter by 10 percent to 20 percent this month and in February from an average of 300,000 tons to 350,000 tons a month, according to Von Bundit Co., the nation’s second-largest producer.

Bloomberg

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