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July 28 (Bloomberg) — Rubber declined for the first time in 10 days on speculation demand from China, the world’s largest consumer, may weaken after prices climbed to the highest in more than eight months.
Futures in Tokyo lost as much as 1.6 percent after reaching the highest since Nov. 10. Prices advanced 14 percent this month, heading for the best monthly gain since December 2006, as a rally in global equities raised speculation economic growth will boost raw material demand.
“The price surge put a brake on Chinese purchases,” Kazuhiko Saito, chief analyst at Tokyo-based commodity broker Fujitomi Co, said today by phone. “Chinese buyers will probably wait until prices return to an affordable level.”
December-delivery natural rubber lost as much as 3 yen to 183.7 yen a kilogram ($1,934 a metric ton) on the Tokyo Commodity Exchange before trading at 184 yen at 11:21 a.m.
Rubber inventories monitored by the Shanghai Futures Exchange rose 1,898 tons to 48,693 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the exchange said July 24. It was the highest volume since April.
Rubber futures gained 35 percent this year after losing 56 percent in 2008 as exporters reduced shipments to support prices amid the global recession.
Thailand, Indonesia and Malaysia, the three-largest rubber producers, may deepen a planned supply reduction this year as the recession curbs consumption, Abdul Rasip Latiff, chief executive officer of the International Rubber Consortium Ltd., said July 26. Indonesia, the second-largest exporter, reduced its output target for this year to 2.2 million metric tons from 2.5 million tons, Asril SutanAmir, the chairman of the Indonesian Rubber Association, said July 23.
Thailand, Indonesia and Malaysia will cut shipments by as much as 48,000 tons a month in the second half, Latiff said July 15. The trio reduced exports by 540,000 tons in the first five months of the year, more than the 414,000 ton reduction planned for the first half, he said.
Rubber for January delivery on the Shanghai Futures Exchange, the most-active contract, fell 1.6 percent to 17,630 yuan ($2,581) a ton at 10:26 a.m. local time.
Source: Bloomberg