Rubber Tumbles to Lowest Level in Five Months on Demand Concerns

Rubber slumped for a fifth day to the lowest price in five months as a selloff in commodities from crude oil to metals raised concern that global demand is waning.

Rubber for delivery in September lost as much as 3.9 percent to 242.6 yen a kilogram ($2,474 a metric ton) on the Tokyo Commodity Exchange, the lowest level for the most-active contract since Nov. 14. Futures traded at 247.1 yen by 11:34 a.m.

Copper in London fell below $7,000 for the first time in almost 18 months on weak economic data from Europe to China, the biggest consumer of metals and rubber. West Texas Intermediate crude fell for a fifth day. The global economy will expand 3.3 percent this year, less than the 3.5 percent forecast in January, the International Monetary Fund said April 16. The IMF cut its forecast for China’s 2013 growth to 8 percent from 8.2 percent.

“Sentiment is bearish for commodities, weighing on rubber,” Ker Chung Yang, an analyst at Phillip Futures Pte, said by phone from Singapore. Prices are also pressured by the high levels of rubber stockpiles, he said.

Global inventories are set to climb to 2.17 million tons in 2014, the highest in 13 years, as production exceeds consumption through next year, London-based industry adviser The Rubber Economist said last week. Stockpiles at Qingdao, China’s largest hub for rubber, climbed to a record 366,900 tons by April 15, according to the Qingdao International Rubber Exchange Market.

Rubber for September delivery on the Shanghai Futures Exchange fell by the daily-price limit. The contract for September delivery lost as much as 3.4 percent to 18,575 yuan ($3,005) a ton.

Thai rubber free-on-board dropped 1.5 percent to 82 baht ($2.84) a kilogram yesterday, according to the Rubber Research Institute of Thailand. The price touched 81.75 baht on April 5, the lowest level since November 2009.

To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

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

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