Rubber declined to a one-week low as a cash crunch in China, the biggest consumer, is spreading to the nation’s auto dealerships.
Rubber for delivery in December on the Tokyo Commodity Exchange fell as much as 3 percent to 234.3 yen a kilogram ($2,316 a metric ton), the lowest level for a most-active contract since July 1. Futures traded at 236.8 yen at 10:37 a.m. local time and have lost 22 percent this year.
China’s cash crunch has led to psychological panic among auto dealers over access to financing, Luo Lei, deputy secretary-general of the China Automobile Dealers Association, said yesterday. The state-backed China Association of Automobile Manufacturers is scheduled to release wholesale vehicle sales data today.
“Investors remain concerned over slow demand from China,” said Gu Jiong, an analyst at commodity broker Yutaka Shoji Co.
China’s inflation stayed subdued in June while a decline in factory-gate prices extended its longest streak in a decade, underscoring weaker demand in an economy that probably decelerated for a second quarter.
Rubber for January delivery on the Shanghai Futures Exchange was little changed at 17,195yuan ($2,804) a ton.
Thai rubber free-on-board declined 0.9 percent to 81.70 baht ($2.62) a kilogram yesterday, according to the Rubber Research Institute of Thailand.
Source: Bloomberg
