Bloomberg News

Rubber Drops, Paring Weekly Advance as Economic Concerns Grow

October 26, 2012

Rubber declined from a one-week high, paring the first weekly advance in three, as concerns grew that a slowdown in global economies will curb raw-material demand.

Rubber for March delivery dropped 1 percent to settle at 257.7 yen a kilogram ($3,224 a metric ton) on the Tokyo Commodity Exchange. The contract increased 0.9 percent this week.

Gross domestic product expanded 1.6 percent in the three months through September from a year earlier, the slowest pace since 2009, Bank of Korea data showed today, adding to signs that Europe’s debt crisis decelerates growth in emerging markets. Asian stocks fell as China Unicom (Hong Kong) Ltd. and Apple Inc. joined companies posting results that missed analysts’ estimates.

“Concerns about a global slowdown put a drag on the market,” said Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo.

Futures also declined as the Japanese currency rebounded from a four-month low against the dollar, reducing the appeal of yen-denominated contracts, he said.

The yen weakened to 80.38 per dollar, the lowest level since June 25, before recovering to 79.92 at 4:04 p.m. Tokyo time. A report showing Japan’s consumer prices declined for a fifth month added to prospects the central bank will expand monetary easing next week. The Nikkei newspaper reported yesterday the Bank of Japan will consider increasing its asset- purchase program by 10 trillion yen to 90 trillion yen.

Rubber for January delivery lost 0.5 percent to close at 24,765 yuan ($3,970) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board rose to 95.20 baht ($3.10) a kilogram today from 93.80 baht yesterday, according to the Rubber Research Institute of Thailand.

Rains spread across 70 percent of Thailand’s south, disrupting tapping, according to the institute. The southern region accounts for 80 percent of the country’s supplies.

To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.net;

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net


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