Rubber plunged to a four-month low as the political impasse in Greece increased speculation that the nation may leave the euro, deepening an economic slump in the region and weakening demand for the commodity used in tires.
The October-delivery contract slumped as much as 5.1 percent to 265 yen a kilogram ($3,317 a metric ton), the lowest level for a most-active price since Jan. 6, before settling at 270.1 yen on the Tokyo Commodity Exchange. A slump this month has trimmed rubber’s 2012 advance to 2.5 percent.
Asian stocks fell for a fifth day on evidence of slower growth in China and as doubts mounted Greece can avoid an exit from the currency union. Greece’s President will call a meeting of most party leaders today to make the case for a government of non-politicians.
“The European turmoil raised concerns the Chinese economic slowdown may worsen as the region is the biggest export market for China,” Ken Kajisa, an analyst at broker ACE Koeki Co. in Tokyo, said today by phone. China, the world’s largest auto market, is also the biggest rubber user.
Foreign direct investment in China fell for a sixth month in April, government data showed today. Economic growth may slow to the “mid-7 percent range” this year, according to Pacific Investment Management Co. That’s would be the slowest since 1999.
September-delivery rubber on the Shanghai Futures Exchange dropped 0.7 percent to close at 24,685 yuan ($3,906) a ton. Thai rubber on a free-on-board basis fell 1.7 percent to 115.25 baht ($3.67) a kilogram today, according to the Rubber Research Institute of Thailand.
Thailand’s Rubber Estate Organization left the price at which it will buy ribbed smoked sheets from farmers unchanged at 115.39 baht to 115.48 baht per kilogram, despite a decline at auctions, the agency said on its website today.
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