Rubber declined the most in three weeks as a slump in oil reduced the appeal of the commodity as an alternative to synthetic products used in tires.
The contract for delivery in October lost as much as 2.7 percent, the most since May 2, to 282.5 a kilogram ($2,732 a metric ton). Futures traded at 283.8 yen on the Tokyo Commodity Exchange at 10:28 a.m., extending losses for the most-active contract to 6.2 percent this year.
Oil in New York fell for a third day after the biggest decline in three weeks as U.S. gasoline supplies unexpectedly gained and crude stockpiles dropped less than expected. Commodities came under pressure amid concern the Federal Reserve will scale back stimulus efforts if the labor market improves.
“Rubber tracked losses in oil and metals as speculation strengthened for a change in the U.S. monetary policy,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said by phone today.
Fed Chairman Ben S. Bernanke told lawmakers the flow of bond purchases will slow as the jobs outlook improves in a real and sustainable way. He also said a premature end to its bond buying would put the economic recovery at risk.
Thai rubber free-on-board rose 0.9 percent to 91.15 baht ($3.06) a kilogram yesterday, the highest level since Feb. 22, according to the Rubber Research Institute of Thailand.
Demand for both natural and synthetic rubber will rise about four percent each year over the next decade, Robert Simmons, the head of rubber and tire research at LMC International, said at an industry conference yesterday.
Rubber for delivery in September on the Shanghai Futures Exchange fell 3 percent to 19,840yuan ($3,236) a ton.
Source: Bloomberg
