(Corrects conversion in second paragraph.)
Rubber declined for a second day on concern that high stockpiles in China, the world’s biggest consumer, and in Thailand will continue to pressure prices.
The August-delivery contract fell as much as 1 percent to 333.9 yen a kilogram ($3,989 a metric ton) on the Tokyo Commodity Exchange, before trading at 336.3 yen at 11:12 a.m. local time. The most-active contract has surged 28 percent this year.
Premier Wen Jiabao this month announced an economic growth target of 7.5 percent for this year, down from 8 percent over the past seven years. Natural-rubber inventories totaled 28,194 tons on March 8, based on a survey of nine warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said. That compared with last year’s low of 10,291 tons.
“High levels of rubber inventories in China raises concerns that import demand may slow,” said Chaiwat Muenmee, analyst at Bangkok-based commodity broker DS Futures Co. Abundant supplies from Thai operators are also weighing on prices, he said.
Declines may be limited as a weakening yen improved the appeal of the yen-denominated contracts, Gu Jiong, an analyst at commodity broker Yutaka Shoji, said by phone from Tokyo.
Japanese stocks advanced for a third day as the yen’s drop to an 11-month low against the dollar buoyed earnings prospects for exporters. Stocks gained as the yen reached 84.02 against the dollar today, its lowest since April 13. The currency has weakened on the Bank of Japan (8301)’s expansion of its asset-purchase program and signs of recovery in the U.S. BOJ Governor Masaaki Shirakawa signaled on March 13 that additional bond purchases aren’t off the table.
May-delivery rubber in Shanghai dropped 0.2 percent to 28,805 yuan ($4,550) a ton. The Thai cash price remained unchanged at 124.05 baht ($4.05) a kilogram yesterday, the Rubber Research Institute of Thailand said.
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