Rubber Drops, Paring Second Weekly Gain, as Stockpiles May Grow

Rubber futures in Tokyo declined for a second day, paring a second weekly advance, on concern that stockpiles in China, the largest consumer, may increase.

The contract for delivery in July dropped as much as 1.2 percent to 328.9 yen a kilogram ($3,516 a metric ton) before trading at 331 yen on the Tokyo Commodity Exchange at 11:21 a.m. Futures have gained 2.3 percent this week, the ninth advance in 10 weeks, and are up 9.4 percent this year.

Stockpiles monitored by the Shanghai Futures Exchange rose 0.8 percent to 98,814 tons last week, nearing an almost three- year high reached in January, data from the bourse showed. The figure will be updated today. Inventories may climb further as China’s raw-material purchases slowed before holidays next week, said Hideshi Matsunaga, an analyst at broker ACE Koeki Co.

“A slowdown in Chinese buying has put a brake on rubber prices,” Matsunaga said by phone today in Tokyo.

China’s markets are closed next week for the Lunar New Year holiday. Imports by members of the Association of Natural Rubber Producing Countries, representing 57 percent of global demand, may drop 16 percent in February, the group said in a monthly report. Key members include China, India and Malaysia.

On the Shanghai Futures Exchange, rubber for delivery in September added 0.4 percent to 27,140 yuan ($4,355) a ton. Thai rubber free-on-board dropped 0.8 percent to 98.65 baht ($3.31) a kilogram yesterday, according to the country’s Rubber Research Institute.

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

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

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