TOKYO: Rubber dropped from the highest level in more than 10 months on renewed concern that the European debt crisis will derail the global economic recovery, reducing demand for the commodity used in tyres.
The contract for delivery in July closed 0.5% lower at 331.5 yen a kilogram ($3,596 a tonne) on the Tokyo Commodity Exchange after earlier declining by as much as 1.5%. Futures ended at 333.3 yen on Monday, the highest settlement price for the most-active contract since March 28. Spanish 10-year bond yields jumped to a seven-week high on Monday as the country’s Prime Minister Mariano Rajoy faces opposition calls to resign on corruption allegations.
Rates on Italian debt rose as polls showed Silvio Berlusconi had closed the gap on his rival before elections this month even as he appeals a four-year prison sentence for tax fraud.
“Political turmoil in Spain and Italy caused risk aversion,” Naohiro Niimura, a partner at research companyMarket Risk Advisory in Tokyo, said. Losses were limited on speculation that China, the world’s largest consumer, may step up purchases before the Lunar New Year holiday next week, Niimura said.
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Inventories gained 807 tonne to 98,814 tonne, based on a survey of nine warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said on February 1. That’s compared with 101,482 tonne in reserves on January 10, the highest level since March 2010. Imports by China may rise 0.9% this year to 3.4 million tonne, the Association of Natural Rubber Producing Countries said in its monthly bulletin on February 1.
India Times
