Bloomberg News

Rubber Drops for Sixth Straight Month as Demand Set to Weaken

August 31, 2012

Rubber declined for a sixth straight month after Japan’s industrial production unexpectedly slumped, adding to concern that a global economic slowdown will curb raw- material demand.

February-delivery rubber lost 1.6 percent to close at 217.8 yen a kilogram ($2,776 a ton) on the Tokyo Commodity Exchange, the lowest settlement level since Aug. 16. The most-active contract has dropped 5.2 percent this month, extending this year’s decline to 17 percent. The sixth monthly drop is the worst run since 2008.

Japan’s industrial output fell 1.2 percent in July, while consumer prices decreased 0.3 percent, government data showed today. The figures reflect diminishing demand overseas for the nation’s exports amid the European crisis and exchange-rate appreciation, and the end of incentives for vehicle purchases.

“Data showing a slowdown in the global economy sapped investor appetite,” Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo, said today by phone.

Japan’s weakening accompanies signs of slowing across Asia. South Korea today reported a 1.6 percent drop in industrial production in July from the previous month.

January-delivery rubber lost 1.3 percent to close at 21,490 yuan ($3,385) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board was unchanged at 85.85 baht ($2.74) a kilogram today, according to the Rubber Research Institute of Thailand.

To contact the reporter on this story: Aya Takada in Tokyo at

To contact the editor responsible for this story: James Poole at

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