Rubber declined the most in three weeks as oil prices dropped, cutting the appetite for the commodity used in tires, amid speculation that the U.S. Congress won’t endorse a strike against Syria.
Rubber for delivery in February lost as much as 2.1 percent, the biggest drop for a most-active contract since Aug. 20, to 280 yen a kilogram ($2,812 a metric ton) on the Tokyo Commodity Exchange. Futures traded at 280.4 yen by 12:05 p.m. local time, down 7.3 percent this year.
West Texas Intermediate fell as much as 1.2 percent in New York, extending yesterday’s 0.9 percent slide, as President Barack Obama said he wasn’t confident he will get congressional approval for a military strike. The drop in crude eased speculation prices of competing synthetic products will increase.
Easing tension over Syria “is the reason why rubber prices declined,” said Naohiro Niimura, a partner at research company Market Risk Advisory Co. in Tokyo.
Russia’s plan to get Syria to surrender its chemical weapons is a “potentially positive development” that could avert U.S. action, Obama said in an interview with NBC News.
The contract for January delivery in Shanghai lost 1.6 percent to 20,535 yuan ($3,355) a ton. Thai rubber free-on-board gained 0.9 percent to 87.40 baht ($2.73) a kilogram yesterday, according to data from the Rubber Research Institute of Thailand.
The country’s national rubber policy committee planned to double its budget to 21.2 billion baht to subsidies production costs for farmers, Deputy Prime Minister Kittiratt Na-Ranong said yesterday. Planned subsidy implies support of 12 baht per kilogram, bringing the price of rubber to 90 baht, he said.
Thai farmers will meet today to consider whether to hold rallies across the country’s southern provinces on Sept. 14. They earlier threaten to step up protests if the government fails to meet their demands to set a minimum price for ribbed smoked sheet. Southern provinces account for about 80 percent of production in Thailand, the world’s top producer and exporter.
Sourc: Bloomberg
