Rubber Slumps Most in 8 Months on Yen, Bridgestone Consumption

Rubber slumped the most in more than eight months as a rally in Japan’s currency cut the appeal of the yen-based contracts and after a report that Bridgestone (5108) Corp. may reduce consumption ignited concerns about demand from tiremakers.

The contract for delivery in September lost as much as 5.4 percent to 261.4 yen a kilogram ($2,655 a metric ton) before trading at 264 yen on the Tokyo Commodity Exchange at 10:23 a.m. The drop extended this year’s losses to 13 percent.

The yen rose to a one-week high against the dollar after the U.S. Treasury said in a report April 12 that Japan must refrain from competitive devaluation. Bridgestone, the world’s largest tiremaker, may use 2.6 percent less rubber this year than projected in February as demand in the U.S. will be slower than forecast, a Nomura Holdings Inc. analyst said in an interview.

“The news about Bridgestone underlined weakness in demand for the commodity,” Kazuhiko Saito, analyst at broker Fujitomi Co. in Tokyo, said today by phone. “Futures also lost support from the currency market as the yen rebounded.”

Thailand, Indonesia and Malaysia, the top rubber suppliers, met last week in Phuket to discuss measures to support prices. The three nations cut exports by 300,000 tons as targeted and will discuss next month replanting as a complementary measure, Yium Tavarolit, chief secretary at the International Rubber Consortium, said after the gathering.

Thai rubber free-on-board added 1.2 percent to 83.25 baht ($2.86) a kilogram on April 11, according to the Rubber Research Institute of Thailand. The price rebounded after touching 81.75 baht on April 5, the lowest level since November 2009.

On the Shanghai Futures Exchange, the contract for September delivery lost 4.4 percent to 20,410 yuan ($3,398) a ton.

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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