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Jan. 21 (Bloomberg) — Rubber fell for the first time in three days on speculation that credit controls in China, the world’s biggest consumer for the commodity used to make tires, may slow economic growth.
Futures dropped as much as 2.2 percent after nearing a 16- month high yesterday. China will limit lending growth in the nation, Liu Mingkang, a banking regulator, said yesterday. The Asian nation is under pressure to keep its economy from overheating after government officials in November cited the risk of inflated asset prices.
“China says everything about commodities, including rubber as well as metals,” said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co. “A firmer dollar and lower oil prices also put pressure on rubber futures.”
Rubber for June delivery lost as much as 6.6 yen to 294.2 yen per kilogram ($3,223 a metric ton) on the Tokyo Commodity Exchange and traded at 296.7 yen at 10:40 a.m. local time.
China, the world’s third-largest economy, replaced the U.S. as the world’s biggest auto market last year as government stimulus measures fuelled a 46 percent jump in vehicle sales. It will probably report fourth-quarter growth of 10.5 percent today, according to a survey of economists by Bloomberg News.
That would be the most in 21 months and follows an 8.9 percent expansion in the third quarter. The acceleration reflects an unprecedented $586 billion fiscal program and a credit-fueled investment boom that shielded China from the world recession.
Rubber futures touched 306.0 yen on Jan. 15, the highest level since Sept. 9, 2008. Prices rose the past two days after Thailand, Indonesia and Malaysia, the largest rubber producers, said they would monitor demand and supply and take steps to counter any decline in prices. The three countries account for about 70 percent of global output.
Crude oil for February delivery was little changed at $77.58 a barrel after losing 1.8 percent yesterday. A drop in oil prices often erodes the competitiveness of natural rubber against rival synthetic products made from petroleum.
Source: Bloomberg