Rubber declined for a second day as a strengthening Japanese currency reduced the appeal of yen-denominated contracts and investors remained concerned that demand is slowing in China, the biggest user.
Rubber for delivery in December lost as much as 2.2 percent, the biggest drop for a most-active contract since June 25, to 239.7 yen a kilogram ($2,401 a metric ton) on the Tokyo Commodity Exchange. Futures traded at 243.7 yen at 10:24 a.m. local time and have fallen 19 percent this year.
China may have difficulty realizing a 7.5 percent growth target for this year, 21st Century Business Herald reported today, citing Fan Jianping, chief economist at the State Information Center. The country is undergoing economic restructuring including reducing manufacturing capacity, the report cited Fan as saying. The yen was at 99.93 per dollar after yesterday rising 0.7 percent to 99.91.
“A strengthening Japanese currency and slower economic growth in China reduced demand,” said Gu Jiong, an analyst at commodity broker Yutaka Shoji Co.
China’s non-manufacturing purchasing managers’ index fell to 53.9 in June from 54.3 in May to the second-lowest reading since March 2011, when Bloomberg started tracking the data. The slowdown in service industries underscores Premier Li Keqiang’s challenge in achieving sustainable growth across the second-biggest economy through increasing consumption and reducing reliance on exports and investment.
Rubber for January delivery on the Shanghai Futures Exchange gained 0.4 percent 18,120 yuan($2,956) a ton. Thai rubber free-on-board fell 1.2 percent to 83.65 baht ($2.69) a kilogram yesterday, according to the Rubber Research Institute of Thailand.
Source: Bloomberg
